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View all search results2019 set to end with wider fiscal deficit amid poor tax revenue
The government’s 2019 fiscal position stands in stark contrast with that of the preceding year amid weak global commodity prices and a slowdown in global trade, which contributed to disappointing tax revenue and a wider fiscal deficit.
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Finance Minister Sri Mulyani Indrawati (center) talks to a legislator after presenting her fiscal policy principles as part of the 2020 state budget in May, 2019. (Antara/Puspa Perwitasari)
The government’s 2019 fiscal position stands in stark contrast with that of the preceding year amid weak global commodity prices and a slowdown in global trade, which contributed to disappointing tax revenue and a wider fiscal deficit.
As of November, this year’s tax revenue – which includes income tax, value added tax (VAT), luxury tax (PPnBM) and land and building tax (PBB) and more – has reached Rp 1.13 quadrillion (US$80.84 billion). That is only 72.02 percent of the Rp 1.57 quadrillion target set in the 2019 budget and marks a marginal drop from tax collected over the corresponding period of last year.
Almost every business sector recorded lower tax payment in 2019 compared to last year. The manufacturing sector, which contributed around a third of total tax revenue, contracted by 3.1 percent year-on-year (yoy) in the first 11 months of this year to Rp 312.9 trillion, in contrast to 12.1 percent yoy growth booked over the same period last year.
The trade sector, which is the second-largest tax revenue contributor, booked 2.2 percent yoy growth to Rp 219.34 trillion in the January-November period, significantly lower than 23.2 percent yoy growth recorded over the same period in 2018.
Slower global trade also impacted Indonesia’s import and export duty revenue, which dropped by 5.04 percent yoy and 48.49 percent yoy, respectively, in the first eleven months.
Non-tax revenue (PNBP), which is heavily reliant on fluctuating global commodity prices, booked 3.44 percent yoy growth as of November this year to Rp 362.76 trillion, in contrast to 35.1 percent growth recorded over the same period last year. PNBP from the natural resources sectors contracted by 9.22 percent to Rp 139.14 trillion as of November from Rp 153.74 trillion of PNBP revenue collected over the same period last year.
Finance Minister Sri Mulyani Indrawati said unfavorable external conditions had contributed to the decline in non-tax revenue from the natural resources sectors.
