Indonesian Government's Proposed No Negotiation about Tax Ratio

Yogyakarta Reporting - Economist Mutual Fund Research Institute, "Purbaya Yudhi Sadewa" suggested the government should not negotiate with the Indonesian House of Representatives about the tax ratio (the ratio of taxes).

Because it concerns the performance in achieving the targets agreed upon with the assumption that the House of Representatives.

"The Indonesian government has given the power to run the government. It is better to receipts submitted to the Indonesian Government not to discussions with the House. Later on when baseball on target then can there dimaki-maki (DPR), but do not negotiate on it," he said when met at the office of Coordinating Minister for Economic Affairs, Jalan Banteng Square, Jakarta, Friday (16/4/2010).

In addition, he also advises not to try to raise the tax ratio for tax ratio was determined based on the target has been achieved the Indonesian Government. If still want to be raised still need some time.

"Do we determine the numbers in the sky because it will be in the clouds. Other countries there are 20 percent, but please do not be achieved within one to two years, needs fundamental change," he said.

Earlier, experts from the input document of Commission XI of DPR RI Budget Simulation Macro-P Asumis cited okezone 2010, the House Commission XI forcing the Indonesian government to increase the tax ratio to 13.5 percent of GDP this year to support the creation of economic growth 6.2 percent in order to keep the budget deficit remained 2.1 percent of GDP.

In the data, with the House Commission XI on calculating tax ratio 13 per cent of gross domestic product (GDP) Rp6.050 trillion, the tax collection increased to Rp786, 5 trillion, bringing the total state revenues increased to Rp1.028 trillion.

With these assumptions, there are a number of scenarios that appear related to the correlation between the tax ratio, economic growth and budget deficits.

However, if spending is maintained at Rp1.104, 6 trillion, then state revenues potentially up to Rp1, 028 trillion, with a permanent record deficit Rp76, 55 trillion. If the budget deficit was kept Rp129, 8 trillion, or 2.1 percent, the state expenditure could be increased to Rp1.157, 8 trillion.

Meanwhile, if the Government of Indonesia is able to raise the tax ratio to 14 percent of the required increase of 16 percent or a total of Rp847 trillion. If the tax ratio increase of 15 percent of the tax revenue needed Rp907, 5 trillion or an increase of 24 percent.

Even if, based on initial demand of the House of Representatives Commission XI tax ratio increase of 16 percent, the government of Indonesia needs to boost tax revenue rose by 32 percent or a total of Rp968 trillion.

In the meeting last night, the amount of tax ratio is yet to be decided and will be specifically discussed between the Government of Indonesia and the House of Representatives Commission XI on next week. (Martinhaeszone)