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Jakarta Post

Indonesia’s 2019 budget deficit widens to 2.2 percent amid tax revenue short fall

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Tue, January 7, 2020   /   05:43 pm
Indonesia’s 2019 budget deficit widens to 2.2 percent amid tax revenue short fall Finance Minister Sri Mulyani Indrawati. (AFP/Zach Gibson)

Indonesia’s 2019 state budget deficit totaled 2.2 percent of gross domestic product (GDP), wider than the government’s target of 1.8 percent due a revenue shortfall of around Rp 207.9 trillion (US$15 billion). 

The government collected Rp 1.96 quadrillion in state revenue last year, below its target of Rp 2.16 quadrillion, Finance Minister Sri Mulyani Indrawati said in Jakarta on Tuesday

“The budget deficit has widened from the target of 1.8 percent of GDP but was far lower compared to other emerging markets […],” she told reporters during a press briefing. 

The tax office collected Rp 1.33 quadrillion in tax revenue last year, or 84.4 percent of the full-year target, causing a shortfall of Rp 245.5 trillion, the worst in at least the last five years.

“Contractions in the manufacturing sector and mining industry have resulted in lower tax revenue,” said the former World Bank managing director.

The manufacturing industry contributed Rp 365.49 trillion in tax revenue while the mining sector chipped in Rp 66.12 trillion. The tax contributions of the two industries were down 1.8 percent year-on-year (yoy) and 19 percent yoy, respectively.

Non-tax income, meanwhile, amounted to Rp 405 trillion last year, surpassing the state budget target of Rp 378.3 trillion. 

Meanwhile, state expenditure totaled Rp 2.31 quadrillion, 4.4 percent higher compared to the previous year. In total, Rp 1.5 quadrillion was spent by the central government, while the remaining Rp 811.3 trillion was allocated to regional administrations and village funds.