JAKARTA: Indonesia’s tax revenue collection fell short of the government’s target for the first four months of the year, as weak oil prices and lower retail receipts signal an economic slowdown might have stretched into the second quarter.
The Indonesian government collected 310.1 trillion rupiah (US$23.8 billion) in the first four months of the year, or 24 percent of its target for the full year, the Indonesian Ministry of Finance’s tax office said in a statement on its Web site here the other day. That was 1.3 percent lower than the same period last year.
Indonesian President Joko Widodo is seeking to boost tax collection to fund better infrastructure, education and healthcare in Southeast Asia’s largest economy.
The government expected state investment to start lifting growth from last month, after the economy contracted 0.18 percent on a quarterly basis in the January-to-March period.
“I’m a bit pessimistic that the government will achieve its target,” Jakarta-based PT Bank Permata economist Josua Pardede said. “It seems the government has to borrow more by issuing more bonds.”
The government is prepared for a shortfall in revenue, and a budget deficit this year of as much as 2.3 percent of GDP would be “still OK” from a targeted 1.9 percent, Indonesian Minister of Finance Bambang Brodjonegoro said in an interview this month.
The government is starting a campaign to improve collection by allowing citizens to avoid penalties if they pay five years of unpaid taxes, Brodjonegoro said.
Tax revenue from individuals and companies rose 10.6 percent from a year earlier in the four months through last month, though oil and gas receipts fell 46.2 percent on weaker prices, the tax office statement showed.
A 5.25 percent drop in value-added and luxury taxes might show weaker consumer spending, Jakarta-based PT Bank Central Asia economist David Sumual said.
Household spending accounts for more than half the economy.
