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Govt raises 2023 revenue forecast, eyes more subsidies
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Sri Mulyani speaks at the G20 Tax Symposium in Bali on July 14, 2022. (Finance Ministry/Biro KLI)
T
he government has revised up its revenue projection for next year’s state budget, banking on higher income from taxes and extractive industries, but a planned hike in spending means this will not translate into a lower deficit.
With the revenue target raised by Rp 19.4 trillion (US$1.3 billion), next year’s total income is now projected to be Rp 2.46 quadrillion. Rp 4.3 trillion of the additional income is expected to come from tax and excise, while nontax revenue, which largely comes from natural-resource businesses like mining firms and oil and gas producers, may contribute an extra Rp 15.1 trillion.
The latest revenue forecast marks an 8 percent increase from projected 2022 state revenue amounting to Rp 2.26 quadrillion, which itself has been revised up from what is stated in the state budget plan.
Finance Minister Sri Mulyani Indrawati attributed the hike to an expected improvement in the domestic economy next year, which would translate into higher tax collection, but also to a change in the government’s assumption of the rupiah’s exchange rate, which is now forecast to average Rp 14,800 per US dollar instead of Rp 14,750, as previously projected.
“With the adjusted macro assumptions […] you can see that there is potential for higher revenue,” Sri Mulyani told reporters on Wednesday.
In the meeting, the minister also elaborated on changes to two other macroeconomic assumptions, namely inflation of 3.6 percent rather than 3.3 percent and higher natural gas lifting at 1.1 million barrels of oil equivalent.
Despite the higher revenue projection, the Finance Ministry expects little change to the 2023 budget deficit, which is seen to dip by a marginal 0.01 percentage points from the earlier plan to 2.84 percent of GDP.
