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Jakarta Post

Tax collection at turning point

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Mon, November 18, 2019   /   08:22 pm
Tax collection at turning point Finance Minister Sri Mulyani Indrawati. (AFP/Zach Gibson)

Finance Minister Sri Mulyani Indrawati says she sees the glass half full, with tax collection showing early signs of recovery after 10 months of being sluggish.

“We are monitoring tax revenue on a monthly basis. Some [types of taxes] recorded a turning point [in revenue growth],” said Sri Mulyani in Jakarta on Monday.

Workers’ income tax (PPh 21) and corporate income tax started to show early signs of improvement in October, despite overall slow tax collection so far this year.

Corporate income tax, which accounted for 18.9 percent of total tax revenue, grew 8.54 percent during the month. PPh 21, meanwhile, grew 10.42 percent last month. Revenue from both types of tax previously contracted in the third quarter of the year.

Total tax revenue reached 65 percent of the target as of October, reaching Rp 1.01 quadrillion (US$72.36 billion). The figure represents 0.23 percent year-on-year (yoy) growth from the January-October period last year.

Tax from the manufacturing sector, which accounted for about one-third of total tax revenue, contracted 3.5 percent yoy between January and October this year to Rp 277.33 trillion, a reversal from the 12.3 percent growth booked over the same period last year.

Meanwhile, tax revenue from the financial services and insurance sector grew 7 percent yoy in the first 10 months of this year to Rp 137.38 trillion, slightly lower than the 10.4 percent yoy growth over the same period last year.

The transportation and warehousing sector recorded 17.9 percent yoy growth between January and October this year, higher than the 13.5 percent booked over the same period last year. With a Rp 40.32 trillion contribution so far this year, the sector accounts for 4.3 percent of total tax revenue.

Taxation Director General Suryo Utomo said the tax authority would closely monitor sectors that had posted good tax revenue growth to bring tax revenue closer to the 2019 target.

“In the next two months we will intensively monitor the sectors that have positive pulses,” said Suryo. “We are trying to optimize its monitoring [for the selected sectors] so that tax revenue can be safeguarded.”