JAKARTA: Indonesia expects to meet its tax revenue target this year for the first time in more than a decade as business operations recover from the impact of the coronavirus pandemic, Finance Minister Sri Mulyani Indrawati told a media briefing on Thursday.
Indonesia is targeting tax revenues of rupiah 1,444.5 trillion (US$101.26 billion) this year and the government had collected rupiah 953.6 trillion, or 78 percent of the target, by the end of October, Sri Mulyani said.
That is an increase of 15.3 percent compared to the same period last year.
“This reflects an economic recovery where companies can now pay taxes again as their operations improved,” Sri Mulyani told the virtual briefing, adding that higher commodity prices had also helped increase the amount of tax collected.
The higher revenues are a step towards fiscal consolidation by 2023, she said.
The government aims to reduce the budget deficit to below 3 percent of GDP by 2023 to comply with current legislation.
The deficit was 3.29 percent of GDP in January to October, Sri Mulyani said. The government is targeting a deficit of 5.7 percent of GDP by 2021.
Luky Alfirman, the senior official at the Ministry of Finance, told the same briefing that the revenue collection could mean Indonesia will not have to sell bonds this year to fund the 2022 budget.
“Our budget condition is very good, so we may not be pre-financing, but we are not closing the door on this option,” he said.
Full-year economic growth in 2021 is expected to be between 3.5 percent and 4 percent, compared to a previous estimate of 4 percent growth.
Growth in the third quarter was 3.51 percent below expectations due to the COVID-19 restrictions in July and August, but Sri Mulyani said consumption was improving as the government eased mobility restrictions.