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State revenue drops 7 percent in May amid spending flurry: Sri Mulyani
Indonesia booked its first deficit of the year at 0.1 percent of GDP in May as state revenue fell 7.1 percent amid a flurry of spending that grew 14 percent in May, including on social assistance to mitigate the impacts of El Niño on food prices.
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Finance Minister Sri Mulyani Indrawati speaks at an event on expanding universal health coverage on April 18, 2024, held during this year’s Spring Meetings of the International Monetary Fund and the World Bank Group (WBG) at the WBG headquarters in Washington, DC. (AFP/Mandel NGAN)
S
tate revenue dropped 7.1 percent year-on-year (yoy) in the first five months of 2024 as the prices of Indonesia’s main export commodities subsided amid sluggish global demand, Finance Minister Sri Mulyani Indrawati revealed on Thursday.
As of May, the government had collected Rp 1.12 quadrillion (US$68.16 billion) in revenue from taxes, nontax sources and customs and excise.
“Revenue experienced a decline of 7.1 percent from [the same period] last year. Last year, revenue growth was 13 percent. This is a correction from normalization [of commodity prices],” the finance minister said.
The world saw a commodities boom in 2022 only for it to subside the following year, when the prices of Indonesia’s main export commodities like coal and crude palm oil (CPO) underwent sharp corrections.
Meanwhile, tax revenue declined 8.4 percent yoy in the first five months of this year.
Over that same period, corporate income tax dropped 35.7 percent yoy to make a significant dent in taxes collected, since it was the second-largest driver of tax revenue with an overall contribution of 20 percent.
Value-added tax (VAT), the largest contributor to tax revenue, dropped 9.1 percent yoy in the January-May period.
