CITAX

Govt tax target too high: Analyst

THEJAKARTAPOST.COM | 21 Maret 2016

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The government’s 2016 tax revenue target of Rp 1.36 quadrillion is overly ambitious, as it ignores the fact that a proposed tax amnesty – which is expected to drastically boost revenue – has yet to be approved, an analyst has said.

Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said the 2016 tax revenue target had jumped more than 25 percent from last year’s realization of Rp1.06 quadrillion (US$80 billion).

“As the economy has not recovered, and the economic indicators do not greatly differ from 2015, there is a risk that the government will miss its target. Economic distortion can itself cause serious damage to an economy,” he told thejakartapost.com on Sunday.

Retaining the ambitious target would force the taxation directorate general to aggressively raise tax, which would in turn decrease public trust, Yustinus continued, adding that the government should therefore revise the target to a more realistic figure.

Naturally, he continued, tax revenue grows around 13 percent per year, calculated from inflation of 3.5 percent, economic growth of around 5 percent and special efforts resulting in 4 to 5 percent.

“I think an achievable target would be Rp 1.2 quadrillion at a maximum, without a tax amnesty,” Yustinus said.

The House is to discuss the tax amnesty draft bill in April; once passed, the government will be able to begin the 2016 state budget revision and revise the tax revenue target.

According to Yustinus, any delay on the bill will affect the government revenue and spending targets set in the 2016 state budget. He predicted that the bill would be passed by June at the earliest.

Earlier, taxation director general Ken Dwijugiasteadi said the tax amnesty was not the only strategy prepared by the tax office to raise tax revenue, as several other strategies had also been prepared, though he declined to elaborate.

“With or without a tax amnesty, the tax office will continue to do its job. We conduct regular programs, guidance, research and monitoring, backed by the necessary data,” he said at the State Palace on Friday.

The tax office, he continued, has readied 4451 tax examiners and 700 bailiffs over the last two months to help conduct the task. (ags)