Indonesia’s economy, the largest in Southeast Asia, hit a milestone last year by reaching $1tn, yet the mood wasn’t celebratory as the government continued to miss its revenue targets.
Gross domestic product was an estimated $1.004tn in 2017, but economic growth was probably lower than the 5.2% initially projected, according to figures released by Finance Minister Sri Mulyani Indrawati on Tuesday.
Despite having the fourth-biggest population in the world – at more than 260mn – the government collects little tax from its citizens. Government revenue was 14% of GDP in 2016, lower than its peers, and a key obstacle to faster growth and credit-rating upgrades. Revenue was 80tn rupiah ($5.9bn) short of its target last year.
Indrawati, who pledged tax reforms after taking office in 2016, said the government has to strike a balance in chasing its revenue goals, and doesn’t want to increase pressure on companies that are already taking strain because of volatile commodity prices.
“If we look back to 2014, 2015 and 2016, the tax targets were too high and created doubts about the credibility of the state budget. The public also felt that we were breathing down their neck,” she said. “In the future, we will improve our tax collection process and coordination between agencies.”
Despite the lower tax take, the government also underspent on its budget, resulting in an estimated fiscal deficit of 2.6% of GDP compared with a previous forecast of 2.9%. The government is mandated to keep the shortfall under 3% of GDP.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Bitcoin jolted by regulation worries, falls 7pct on extended selloff
Qatar to play a role in production of Turkey’s first automobile
Incentives, facilities to encourage joint investments between Qatar and Turkey
Qatar-Turkey trade volume to increase in 2018, says Qatar Chamber chairman
QNB Group profit surges 6% to QR13.1bn in 2017
Qatar witnessing robust momentum in fintech, says Sheikh Abdulla
Masraf Al Rayan posts QR2.03bn profit in ’17, floats 20% cash dividend
Vodafone Qatar customers reach 1.39mn; July network outage compensation totals QR90mn
Europe stock markets rise; euro falls from 3-year high