Declining Revenue: Sri Mulyani Cites Restitution as Root Cause

Monday, 25 March 2024

Declining Revenue: Sri Mulyani Cites Restitution as Root Cause

JAKARTA. Minister of Finance Sri Mulyani Indrawati stated the performance of tax revenue from January to mid-March 2024 showed a decline compared to the same period in 2023. As of March 15, 2024, the realization of tax revenue was recorded at IDR 342.88 trillion.

The cause is the high number of refunds of tax overpayments given by the government to taxpayers.

This resulted in the two largest sources of tax revenue, namely corporate income tax and domestic value-added tax (VAT) being corrected by 10.6% and 25.8% respectively as of March 15, 2024.

According to the records of the Directorate General of Taxes (DGT) in January, February, and March 2024, the amount of restitution that has been given is IDR 30.9 trillion, IDR 26.6 trillion, and IDR 13.1 trillion, respectively.

The high restitution was due to the decline in commodity prices in 2024. Thus, it has an impact on the financial performance of each corporation.

This is confirmed by the performance of tax revenue across sectors, with some of the main sectors related to commodities experiencing pressure.

For instance, the processing industry, notably in the palm oil and base metal subsectors, experienced weakening. Similarly, the trade sector, particularly in wholesale trade and fuel, contracted. Additionally, the mining sector, especially coal mining, saw a decline.

The processing industry, for example, weakened, especially in the palm oil industry and base metal industry subsectors. Then, the trade sector, especially in the wholesale trade and fuel subsectors, also contracted. Another sector is mining, especially in the coal mining subsector.

If without taking into account the restitution, Sri Mulyani said that corporate income tax and domestic VAT revenues could grow 7.5% and 6.9% respectively compared to the same period in 2023. (ASP)


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