Indonesia Seeks 20% Boost In Tax Revenue
Thursday, February 25, 2010
During a seminar, Indonesia’s Director General of Taxation, Mochammad
Tjiptardjo, announced that the government is formulating strategies to reach
its tax revenue target of IDR1,000 trillion (USD107.5bn) in 2013.
To get from the tax revenues of IDR611 trillion budgeted in 2010, to the IDR1,000
trillion target by 2013, would mean, he said, that tax revenues will need to
increase by almost 20% per year. As Indonesia’s normal average annual
tax revenue growth has been set at around 12%, the government will require an
additional effort of up to 8% per year to achieve its objective.
Mochammad Tjiptardjo laid down four policies the government will pursue to
achieve the sought-for tax revenue increases. Incentives will be provided for
companies in selected sectors; the present policy of detailing and categorizing
taxpayer profiles will continue; the enforcement of regulations against tax
evaders will be pursued; and there will be additional reforms in tax administration.
In the first policy mentioned, the business sectors chosen for incentives
would be those already providing significant tax revenues, or in which it is
believed there is potential for growth, including, it was said, mining, financial
services and construction. It was also proposed that small and medium-sized
enterprises should be provided with incentives in order to promote their growth.