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Indonesia’s budget deficit predicted to widen to 2.8 percent

Indonesia’s 2020 state budget deficit is likely to further increase to 2.8 percent of the country’s gross domestic product (GDP), much higher than the government’s target, as tax reforms would result in lower revenue collection, according to local economists.
Indonesia’s budget deficit predicted to widen to 2.8 percent ảnh 1The tax office collected 1.33 quadrillion Rp in tax revenue last year, 84.4 percent of the full-year target, causing a shortfall of  245.5 trillion Rp, the worst in at least the last five years. (Source: https://www.thejakartapost.com/)

Hanoi (VNA) - Indonesia’s2020 state budget deficit is likely to further increase to 2.8 percent of thecountry’s gross domestic product (GDP), much higher than the government’starget, as tax reforms would result in lower revenue collection, according to localeconomists.

Economist Tauhid Ahmadfrom the Institute for Development of Economics and Finance (Indef) said thebudget deficit may reach 486 trillion Rp (35.5 billion USD) this year, comparedwith the government’s target of 307.2 trillion Rp, which represents 1.76percent of GDP.

The Indonesian government is being too optimistic because thetax revenue growth assumption of 13 percent is too high considering realizedtax revenue grew by only 8 to 9 percent each year, he said.

The state budget deficit in 2019 totalled 2.2 percent of GDP, higher than thegovernment’s 1.8-percent target because of a revenue shortfall of about 207.9trillion Rp.

Indonesian Finance Minister Sri Mulyani Indrawati said on February 5 that thesweeping tax reforms through the omnibus bill, which is to reduce corporateincome taxes and make internet giants pay taxes, would await approval by theHouse of Representatives before full implementation.

Previously, she announced that the government would reduce corporate income taxfrom the current 25 percent to 22 percent in 2021 and then to 20 percent in2023./. 
VNA
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