Tax Realization as of April 2024: Contraction Widened to 9.2%

JAKARTA. The realization of tax revenue in the January-April 2024 period is still experiencing a contraction, even widening. With the total tax collected of IDR 624.19 trillion, it contracted by 9.2% on an annual basis or compared to the realization of the same period in 2023.

This minus growth rate is greater than what happened in January to May 2024. For information, in January tax revenue grew negatively by 8%, February minus 3.3%, and March by 8.8%.

According to Minister of Finance Sri Mulyani, the performance of tax revenue during January-April 2024 was influenced by several things. First, the decline in commodity prices has an impact on corporate financial performance. 

Corporate Performance

With the pressure experienced by corporations, their ability to pay taxes is also affected. This can be seen from the realization of corporate income tax revenue which grew minus 35.5%. In fact, Corporate Income Tax contributes up to 22.1% to total tax revenue. 

“With falling commodity prices there is a decrease in profits, so their obligations have decreased,” said Sri Mulyani, when delivering a presentation on the performance of the State Budget for the May 2024 Period, on Monday (28/5).

Restitution Factor

Second, the decline in tax revenue is also a result of the high restitution given. Especially, for domestic Value Added Tax (VAT) revenue. This is confirmed by the comparison between net growth and gross growth in tax revenue.

On a net basis, domestic VAT revenue in April 2024 grew minus 13.9%. Meanwhile, on a gross basis, domestic VAT revenue recorded a positive growth of 9.2%.

Meanwhile, other types of taxes recorded positive growth, such as Income Tax Article (ITA) 21 which on a net basis grew 41.4%, higher than the growth in the same period last year.

This was influenced by the resilience of labor absorption, the improvement in the level of employee income and the increase in the payment of the Religious Holiday Allowance (THR).

Impact of Interest Rate Hike

For ITA 22 on imports recorded an increase of 2.8%. Individual Income Tax revenue also increased by 10.5%. ITA 26 also increased by 15.8% due to an increase in overseas payments. “Especially dividend payments, interest and fees,” said Sri Mulyani.

In addition, final income tax revenue also increased by 15.1%, mainly due to income tax on interest on deposits, savings, and consulting services. This was also driven by the increase in the benchmark interest rate. (ASP)