JAKARTA: Indonesia expects to meet its tax revenue target this year for the first time in more than a decade, as business activities recover from the impact of the coronavirus pandemic, the minister said on Thursday of Finance Sri Mulyani Indrawati at a press conference.
Indonesia is targeting tax revenue of 1,444.5 trillion rupees ($ 101.26 billion) this year and the government had raised 953.6 trillion rupees, or 78% of the target, by the end of October, Sri Mulyani said.
This is an increase of 15.3% over the same period last year.
“This reflects an economic recovery where companies can now pay taxes again as their business improves,” Sri Mulyani said during the virtual briefing, adding that the rise in commodity prices had also helped to increase the amount of taxes collected.
Raising incomes is a step towards fiscal consolidation by 2023, she said.
The government aims to reduce the budget deficit to less than 3% of GDP by 2023 to comply with the law in force.
The deficit was 3.29 percent of GDP from January to October, Sri Mulyani said. The government is targeting a deficit of 5.7% of GDP for 2021.
Senior finance ministry official Luky Alfirman said at the same briefing that raising the revenue could mean Indonesia won’t have to sell bonds this year to fund the 2022 budget.
“Our budgetary state is very good, so we cannot do pre-financing, but we are not closing the door to this option,” he said.
Full-year economic growth in 2021 is expected to be between 3.5% and 4%, compared to a previous estimate of 4%.
Third-quarter growth was below expectations at 3.51% due to COVID-19 restrictions in July and August, but Sri Mulyani said consumption was improving as the government eased mobility restrictions.