he government and House of Representatives make unrealistic assumptions for the revised 2016 state budget and are overly optimistic about the tax amnesty’s effectiveness in generating state revenue, an economist has said.
They have agreed on a draft for the revised 2016 state budget that increases expected state revenue by Rp 51.7 trillion (US$3.93 billion) to Rp 1.78 quadrillion, driven by expected additional tax revenue of Rp 12.1 trillion and non-tax revenue of Rp 39.7 trillion.
Institute for Development of Economics and Finance (INDEF) executive director Enny Sri Hartati said the government and the House were relying too heavily on the tax amnesty to raise Rp 165 trillion in additional revenue, while the bill for the tax amnesty was not even passed into law yet.
"Assuming the bill is deliberated and the program begins in July, it will not be immediately carried out. There will only be five months, or less, to run the tax amnesty program this year. The government is too optimistic with its revenue target," she told thejakartapost.com in Jakarta on Wednesday.
The House and te government also agreed to increase spending by Rp 35.1 trillion to Rp 2.08 quadrillion, with the central government set to spend an additional Rp 20.1 trillion and boosting regional transfers and village fund allocations by Rp 15 trillion.
The budget deficit projected in the draft revision is Rp 296.7 trillion, or 2.35 percent of the gross domestic product (GDP). That is lower than the government’s proposal of a Rp 313.3 trillion deficit, equating to 2.48 of GDP. (ags)
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