JAKARTA, KOMPAS – The Finance Ministry has estimated a shortfall of about Rp 50 trillion (US$3.76 billion) in tax revenues from this year’s target, while state expenditure is estimated to swell by Rp 10 trillion. This will make the deficit larger than the target.
Darussalam from the Danny Darussalam Tax Center said in Jakarta, Tuesday, that despite the larger deficit, tax revenues would be better than last year’s. A shortage of Rp 50 trillion means91.75 percent of this year’s tax revenue target will be achieved.
That achievement, according Darussalam, would be better than the 81 percent and 82 percent achieved in 2015 and 2016, respectively. "In other words, this year is much more credible," he said.
The 2017 State Budget (APBN) targets tax revenues of Rp 1.75 quadrillion, while expenditure is projected atRp 2.08 quadrillion. Thus, the deficit will beRp 330.2 trillion, or 2.41 percent of the gross domestic product (GDP).
Speaking to journalists ahead of the breaking-of-the-fast in Jakarta on Monday, Finance Minister Sri Mulyani Indrawati predicted that the budget deficit would increase to 2.6 percent of the GDP, as it would expand by about Rp 40 trillion from the original plan.
In terms of state revenue, the realization of non-tax state revenues is estimated to be higher than the target due to higher oil prices than the assumption. However, tax revenue realization is Rp 50 trillion below target. As for state expenditures, the realization will certainly be below 100 percent. Last year, for example, state expenditure realization was 89.5 percent.
At the same time, additional state expenditures are expected, including preparations for the 2018 Asian Games, land certification programs, and preparations for local elections to be held this year. Overall state expenditure will thus swell by Rp 10 trillion from the ceiling.
"I am still unable to predict the exact budget posture. However, we have detected a shortage of Rp 50 trillion in tax revenues from the target. On the expenditure side, there will be an increase by up to Rp 10 trillion. Thus, it will widen the deficit by between Rp 37 trillion and Rp 40 trillion from the initial target,” Sri Mulyani added.
All changes in calculations and projections in the second semester, according to Sri Mulyani, will be included in the draft 2017 Revised State Budget, which was initially planned for discussion before the House of Representatives (DPR) takes recess.
Fuel Subsidies
During the first half of 2017, Sri Mulyani said that the realization of diesel fuel subsidies exceeded the ceiling. The state budget projected fuel subsidies at Rp 500 per liter of diesel. However, the average realization was greater than the ceiling, atRp 1,250 per liter of diesel.
In the 2017 Revised State Budget, according to the Finance Ministry’s budget director general, Askolani, the diesel fuel subsidy would be maintained at Rp 500 per liter.The deficit will be temporarily covered by Pertamina. "The calculation will be finalized in the revision of the 2017 State Budget," said Askolani.