Thailand
Indonesia-Sri Mulyani: Govt to Add More Debt following TaxRevenue Shortfall
TEMPO.CO, Jakarta – Finance Minister Sri Mulyani Indrawati said that tax revenue target this year will not be achieved. She predicts a tax revenue shortfall of Rp59.1 trillion. This year’s tax revenue is expected at Rp1,248.5 trillion, whereas the target was set at Rp1,307.6 trillion.
To make up the shortfall, Sri said that the government will add more debt. The budget deficit will be raised to around Rp360-370 trillion from Rp320 trillion due to the additional state budget of Rp10 trillion in 2017 revised state budget (APBN-P). “Deficit is now set at 2.6 percent of GDP,” she said on Monday.
Director General of Budget, Finance Ministry, Askolani said that of the Rp10 trillion, Rp1.2 trillion has been allocated to Agriculture and Spatial Planning Ministry for the land certification program. Moreover, more fund will be disbursed for the preparations of Asian Games.
Sri Mulyani will also make use of the Automatic Exchange of Information (AEoI). At present, she said, Indonesia will establish bilateral cooperation on exchange of information for tax purposes with Singapore, Macau, and Switzerland. Earlier, tax authorities have already been able to access data from another tax haven, Hong Kong, since last week.
“There should be [tax] extensification and intensification both at home and abroad [to generate] over Rp185 trillion,” she said. At home, the government will use regulation in lieu of law (Perpu) No. 1/2017 on Financial Information Access Transparency for Tax Purposes. The regulation allows the government to examine bank accounts with Rp1 billion.
Governor of Bank Indonesia Agus Martowardojo expects the government to be more creative in generating state revenue. Agus said that before considering adding more debt, the government should take into account global currency risks and unstable economy. “Even though interest rates have become lower thanks to investment grade rating from Standard & Poor’s,” he said.
As of April 2017, government debt stands at Rp3,667.41 trillion or roughly 25 percent of GDP. The State Finance Law holds that the maximum debt-to-GDP ratio is set at 30 percent.
Source: https://en.tempo.co/read/news/2017/06/21/056886271/Sri-Mulyani-Govt-to-Add-More-Debt-following-TaxRevenue-Shortfall