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Indonesian 2015 Budget Left To Incoming Government

by Mary Swire, Tax-News.com, Hong Kong

20 August 2014


Critical budget decisions will be left up to the incoming Government, Finance Minister Chatib Basri has said after criticism of the recently announced draft Indonesian 2015 Budget.

Basri said President-elect Joko Widodo, who will take office from the end of October, should be responsible for agreeing fiscal policies, and therefore the Budget includes only conservative measures and a low growth estimate of 5.6 percent.

Criticism of the draft budget presented by outgoing President Susilo Bambang Yudhoyono has centered on the lack of a response to the problem of Indonesia's rising fuel and electricity subsidies, which are expected to cost about 18 percent of budgeted spending in 2015.

Despite tax revenue growth projections of ten percent for 2015, the new Government is expected to announce a number of new fiscal measures. These policies could, for example, include ratification of the tax framework for natural resource exports, and the implementation of measures on the basis of a review by the current Government of tax holidays and other tax incentives for investment. Widodo is aiming to achieve higher growth of seven percent, which he anticipates will unlock higher revenues.

Amid protests about a lack of new measures in this year's budget, Yudhoyono has said he has invited Widodo to incorporate amendments into the draft Budget before it is approved by Parliament.

TAGS: tax | investment | economics | business | tax incentives | fiscal policy | budget | Indonesia | revenue statistics | inflation | business investment

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