Gov´t 2018 Tax Income Target Overly Ambitious: Wiratama Institute

Monday, 13 November 2017 , 14:00:00 WIB -

Minister of Finance Sri Mulyani is seen talking as a keynote speaker in a seminar in Jakarta, Wednesday (Oct.25). (ANTARA)

JAKARTA, GRES.NEWS – The government may be unrealistic with its 2018 tax income target declared in the 2018 State Budget.

"The House of Representatives has passed the 2018 State Budget. There are several points [in the document, red] that needs attention. One is unrealistic tax income target," Muhammad Syarif Hidayatullah, a researcher at Wiratama Institute Muhammad Syarif Hidayatullah, in a press release sent to, Thursday (Oct.26).

According to him, the government should have set a more conservative target and avoid repeating the same mistake in 2015 and 2016.

Syarif explained that the 2018 State Budget targets tax income to reach Rp1,618 trillion, up 9.91 percent from the target this year.

"The target looks conservative if we compare it with the average tax income growth over the past decade that reached 13.9 percent. However, it must be noted that the strong growth was attributed to the commodity price boom in 2009-2012," Syarif said.

Syarif said commodity prices have slumped and resulted in Indonesia’s economic growth that only reached around 7 percent in 2013-2016. Hence, the 9.91 percent growth target may not be achievable.

Contributing to the pressure is the drop in the people’s spending power and the global economic slowdown.

"It (the global economic slowdown, red) has delayed spending and increased precautionary saving among high-income customers. This is evident by their growing savings account," he said.
In 2015 and 2016, the government set 33 percent an 24 percent, respectively, for its tax income target, both were missed. (mag)