Indonesia expects to reach its tax revenue target this year for the first time in over a decade, as business activities recover from the impact of the coronavirus pandemic, Finance minister Sri Mulyani Indrawati told a media briefing on Thursday.
Indonesia is targeting tax revenues of 1,444.5 trillion rupiah ($101.26 billion) this year and the government had collected 953.6 trillion rupiah, or 78 percent of the target, by the end of October, Sri Mulyani said.
That was a rise of 15.3 percent from the same period last year.
“This reflects an economic recovery where businesses can now pay taxes again as their activities improved,” Sri Mulyani told the virtual briefing, added that higher commodity prices had also helped increase the amount of tax collected.
The higher revenues are a step toward fiscal consolidation by 2023, she said.
The government is aiming to bring down the fiscal deficit to below 3 percent of GDP in 2023 to comply with current law.
The deficit was 3.29 percent of GDP in January to October, Sri Mulyani said. The government is targeting a 5.7 percent of GDP deficit for 2021.
Finance Ministry senior official Luky Alfirman told the same briefing that the revenue collection might mean Indonesia will not have to sell bonds this year to finance the 2022 budget.
“Our budget condition is very good, so we may not do pre-funding, but we are not closing the door to this option,” he said.
Full-year economic growth in 2021 is expected to be between 3.5 percent and 4%, compared to an earlier estimate of 4 percent growth.
Third-quarter growth came in below expectations at 3.51 percent due to COVID-19 curbs in July and August, but Sri Mulyani said consumption was improving as the government eases mobility restrictions.
($1 = 14,265.0000 rupiah)