Finance Minister Sri Mulyani Indrawati has expressed concern about a slowdown in tax revenue this year.

By the end of May, the state had collected Rp 727.7 trillion (US$51.52 billion) from taxes and customs, or 31.9 percent of the full-year target stipulated in the 2019 state budget.

That marked a year-on-year (yoy) increase of only grew 5.7 percent, far lower than the yoy growth rate of 14.5 percent measured in the same period last year.

The minister appeared particularly worried that income tax from the oil and gas sector only grew 2.4 percent to Rp 496.6 trillion.

“This is a critical point. We have to closely observe signs of the economic, whether it is steadily strengthening or weakening,” she said on Friday, as quoted by kontan.co.id.

Therefore, she added, the ministry was more cautious in managing the state budget, particularly revenue collection, because the growth in nontax revenue was also weakening at 8.6 percent, lower than 18.1 percent growth in the same period last year.

This year, nontax revenue was still supported by revenue from state assets managed by Bank Indonesia. “Without the contribution from BI, nontax revenue was flat. This indicates that [revenue from] natural resources was under pressure,” Sri Mulyani added.

Director General of Taxation Robert Pakpahan admitted that the tax revenue performance was not as good as last year’s due to the economic slowdown and because of government policies.

He said all tax revenue components had slowed down this year, and value-added tax (VAT) and income tax from luxury goods sales (PPnBM) dropped 4.4 percent, particularly due to a policy of accelerated tax refunds. (bbn)

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