Jakarta, Feb 26 (Antara) - The Indonesian government is contemplating on cutting down its routine budget expenditure in 2016 by some 10 percent due to a predicted decline in tax revenues and drop in oil prices.
In anticipation of the failure to meet the state's revenue target, the government is likely to cut its budget expenditure by Rp200 trillion of the targeted revenues in the state budget totaling Rp2,096 trillion. If realized, the revenue target in the state budget will be reduced to some Rp1,900 trillion.
Vice President Jusuf Kalla stated that the discourse on the reduction of expenditure for ministries/state institutions should be raised as the government needed to evaluate the revenue performance in the state budget.
"If the tax revenue goes down, the budget expenditure will also automatically be reduced," the vice president noted at the Indonesia Summit 2016 in Jakarta on Thursday.
He emphasized that the government should evaluate the state's capability to meet its revenue target in the state budget and adjust it in accordance with the current conditions.
According to Kalla, the budget allocation for routine expenditure should be evaluated, so that the budget cut would not affect the allocation of funds for infrastructure development.
"We hope to evaluate the budget expenditure, but the one that would be reduced is only that allocated for routine expenditure. The expenditure for infrastructure may not go down," he remarked.
He said the budget reduction would be focused on routine expenditure and subsidies. They will be cut on an average by 10 percent. The government is focusing on developing various forms of infrastructure such as roads, ports, and others, so that budget expenditure for this sector would not be reduced.
Kalla said the economic policy packages that had been issued by the government are all intended to improve the country's economic conditions.
The vice president has called on all sides to honestly pay taxes in order to support the government's efforts to achieve its development targets and to realize various development plans, which were important for the people.
"We urge the Ministry of Finance to improve technology to help all people comply with their tax obligations honestly," the vice president stated while opening the National Working Meeting of the Indonesian Muslim Intellectuals Association (ICMI) on Wednesday (Feb. 10).
According to the vice president, there are still several people who should have paid taxes but are not yet touched, not to mention the nation's wealth flowing out and being stashed in neighboring countries.
Earlier, Finance Minister Bambang Brodjonegoro had said the government would soon submit to the House of Representatives (DPR) a draft law on tax amnesty through the issuance of a presidential mandate (Ampres).
"The draft has been completed, and it remains to be submitted (to the DPR). The president will submit it to the House," Brodjonegoro remarked in Jakarta on Tuesday (Jan. 27).
The minister expressed hope that the submission of the Ampres will expedite the deliberations on the draft law, so that it would be endorsed by the house's legislation board in the first semester of 2016 at the latest.
In the meantime, Deputy Finance Minister Mardiasmo stated that the government will increase its efficiency to alleviate the burden on the state budget as a result of the decline in tax revenues.
"The president has ordered the restructuring and refocusing of the targets set in the state budget in an effort to create efficiency and to save on expenditures," Mardiasmo noted on Thursday (Feb. 25).
He did not explain clearly whether the efficiency drive was related to the delay in deliberations on the Tax Amnesty Bill. After all, the submission of the draft of the 2016 Revised State Budget to the House will depend on the results of the tax amnesty deliberations.
However, Mardiasmo made assurance that the efficiency drive will be carried out on the government's non-priority programs, such as official trips, which do not support the effectiveness of work and tasks.
The government will also make additional efforts to support the performance of the tax sector and revise realistic revenue targets based on the current economic conditions.
Therefore, Mardiasmo hoped that the deliberations on the draft law on tax amnesty would be completed on time, so that the government could soon submit the draft of the 2016 Revised State Budget to the DPR and optimize its efforts to collect taxes.
"We hope that the presence of the Tax Amnesty Law would create a fiscal room and additional tax receipts in the Revised 2016 State Budget. However, if there is no tax amnesty, we will calculate a realistic budget and make an extra effort," the deputy minister of finance stated.
Meanwhile, Budgetary Director General Askolani affirmed that the efforts to launch an efficiency drive will be carried out after evaluating the conditions of the state budget in the first two months of 2016. It will also be based on the forecast of economic conditions ahead.
"We will look at the possibility of launching an efficiency drive. But at the current stage, we are still conducting an assessment. This is a matter of process and time. Hopefully, the drive would be launched," he noted.
He emphasized that the efficiency drive would demonstrate the government's commitment to utilizing the budget more efficiently, particularly if the tax revenue realization does not live up to expectations, and the budget deficit shows potential to widen.
"We will ensure that productive expenditure would not be cut, but the one that could be economized will be reduced and monitored," he added.
According to Askolani, for now, the government is focusing on the Draft Law on Tax Amnesty and on coordinating it with the DPR, so that the efforts to maximize tax revenue collection would begin in the middle of 2016.***3*** (A014/INE)
EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 26-02-2016 14:39:1 |
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