Indonesia's Tax Ratio Target for 2024 Set at 9.91%-10.18

Monday, 22 May 2023

Indonesia's Tax Ratio Target for 2024 Set at 9.91%-10.18

JAKARTA. The government targets the level of tax ratio to Gross Domestic Product (GDP) or tax ratio in 2024 to be in the range of 9.91%-10.81%.

This is contained in the 2024 Macroeconomic Framework and Principles of Fiscal Policy (KEM PPKF) document, which is the basis for the preparation of the 2024 State Budget and Expenditure Budget Draft (RAPBN).

In the document, the government discloses a number of efforts to boost tax revenues in 2024. These include strengthening tax reform, taking advantage of the changing trend of digital-based public consumption, and embracing the informal sector to broaden the tax base.

In addition, the implementation of Law Number 7 of 2021 on Harmonization of Tax Regulations (HPP) will also be one of the tools to boost revenue.

However, there are several challenges facing the government, such as the normalization of commodity prices which in recent years has contributed to boosting tax revenues.

The decline in commodity prices is expected to have an impact on revenue from oil and gas income tax, corporate income tax and export duties.

Some of Indonesia's leading sectors related to commodity price movements include fossil energy-based commodities such as coal and oil. 

In addition, the government is also faced with the challenge of a global economic slowdown which will affect demand. (ASP/KEN)


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