Indonesian tax revenues predicted to fall Rp120 trillion short of target

Jakarta, Aug 1(Antara) - Finance Minister Bambang Brodjonegoro predicted a shortfall of Rp120 trillion tax revenues this year mainly on falling commodity prices and rupiah value. "There is potential shortfall of Rp120 trillion and widening deficit (in state budget)," Bambang said here on Friday. The minister said though wider than the target of 1.9 percent, the deficit in state budget would remain safe not exceeding 2.2 percent of the GDP. "Our last position is to keep the deficit not wider that 2.2 percent," he said. One of the factors causing that tax revenues would not be up to target of Rp1,244.7 trillion in 2015 is shrinking tax income from the oil and gas sector, he said. Tax income form the oil and gas sector is expected to decline sharply in 2015 as a result of the oil price fall this year. In the first half of this year tax income from the oil and gas sector reached only Rp27.7 trillion far below the level of Rp44.6 trillion recorded in the same period last year. A decline was also recorded in the revenue in value added tax and luxury sales tax (PPnBM) totaling only Rp175.1 trillion in the first six months of the year as against Rp185.3 trillion in the same period last year. In a bid to make up for the shortfall, the taxation directorate general has issued a "reinventing policy" calling for tax payers to settle their tax obligation with incentive of abolition of administrative sanction. Taxation Director General Sigit Priadi Pramudito said the policy has succeeded in increasing tax revenues by Rp30 trillion until early July, but was still far below potential shortfall of Rp200 trillion in remaining tax obligations. Sigit said tax revenues in the first six months of this year were smaller compared with the same period last year on shrinking revenues in value added tax, luxury sales tax, and income tax from oil and gas sector. In the first six months of the year tax revenues reached only Rp458 trillion , or Rp5 trillion smaller than Rp463 trillion a year before.