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DGT Relies on Four Sectors to Boost 2021 Revenue

Thursday, 04 February 2021

DGT Relies on Four Sectors to Boost 2021 Revenue

JAKARTA. The Directorate General of Taxes (DGT) will focus on the financial services industry, coal, the tobacco products industry, and non-automotive trade to support revenues in 2021.

In the meantime, the tax revenue target pegged by the government in the 2021 State Budget is IDR 1,1229.6 trillion. Citing kontan.co.id, there are several reasons why tax authorities will focus more on those four sectors.

First, based on the realization of tax revenue in 2020, which was recorded at IDR 1,070 trillion, these four sectors contributed the most with a portion reaching 67% of total revenues.

Second, these sectors are estimated to be at the mid-level recovery rate, or not fast but also not slow. While the share of the four sectors is also large in tax revenue.

Although not too fast because of their large portion of revenue, these sectors can be the determinant of the final outcome of tax revenue.

With the exception of those four sectors, there are actually several sectors that are recovering quite rapidly, even earlier when they were still in the pandemic period.

Namely, the first is the information technology sector, food and beverage, and health services.  Second, the air transport, real estate, and automotive sectors.

Two Major Challenges

However, DGT acknowledged that the tax challenges in 2021 are huge. Even though the impact of the pandemic will not be as massive as the one in 2020, there are a few noteworthy points.

First, to support the national economic recovery program, the government will still count on fiscal policy by providing tax incentives.

In fact, the government has extended the incentive deadline to six months, as well as expanded the scope of its recipients.

Second, the government has cut corporate income tax rates from 25% to 22% as stated in Law Number 11 of 2020 on Job Creation.

These factors are projected to erode potential revenue in 2021.

 



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