Indonesia Aiming To Improve Lackluster Tax Take In 2018

Despite failing to achieve revenue collection targets last year, the Indonesian Government has set an ambitious goal for 2018 of boosting collections by 20 percent.

Indonesia posted a nine percent shortfall against budget targets in 2017. However, the Government hopes to considerably boost the tax take in 2018, bargaining on higher non-oil and non-gas sector and value-added tax revenue receipts.

In 2017 the Directorate General of Taxation was set a target of IDR1,472.7 trillion (USD109.4bn). In a January 3 statement, the tax agency reported it collected 91 percent of this target, with revenues amounting to IDR1,340 trillion (USD99.5bn).

The agency said the tax revenue target for 2018 has been increased by 9.9 percent, to IDR1,618.1 trillion (USD120.2bn).

The Government is targeting growth of 13.6 percent in receipts from outside natural resources sectors. VAT receipts are expected to increase by 8.4 percent.

Indonesia will also look to tackle non-compliance. It will newly exchange financial data internationally under the OECD’s Common Reporting Standard, improve taxpayer services, modernize internal systems, and improve the training of officials.