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Jakarta Post

Govt sets tax ratio target at 13 percent of GDP

Govt sets tax ratio target at 13 percent of GDP Finance Minister Sri Mulyani Indrawati has set the 2017 tax ratio target at 13 percent of gross domestic product (GDP). (Tempo/-)
Ayomi Amindoni
Jakarta   ●   Tue, August 30, 2016

Amid a hazy global economic outlook that has disrupted the Indonesian economy, Finance Minister Sri Mulyani Indrawati has set the 2017 tax ratio target at 13 percent of gross domestic product (GDP), an increase from 12 percent.

She revealed the target during a plenary meeting with the House of Representatives in Jakarta on Tuesday, responding to House members’ opinions on the tax revenue target set out in the draft 2017 state budget bill.

According to Sri Mulyani, the tax revenue target in the bill was more realistic and measurable considering the global and national economic outlook for the coming year.

"To achieve the target, we will improve taxation services including in the ease of payment, tax reports and access to tax information, increase the effectiveness of collection, law enforcement, tax intensification and extensification, as well as increasing the effectiveness of counseling to increase taxpayers’ awareness and compliance," she said.

Regarding the government's flagship tax amnesty program, which was initiated on July 1, the minister said it aimed to be an alternative measure to reduce tax evasion, which would also improve and broaden the tax base in 2017. "Various taxation policy measures will need the support of all parties to improve the tax ratio, tax buoyancy and tax coverage."

Indonesia's tax ratio has hovered around 11-12 percent for years, according to World Bank and Organization for Economic Cooperation and Development (OECD) data. The last time the country reached a 13 percent tax ratio was in 2008 during the commodity boom. (ags)