Jakarta opens 2024 with 8% drop in January tax revenue

Finance Minister Sri Mulyani Indrawati prepares to present the state budget on Jan. 2, 2024 at the ministry in Jakarta. (The Jakarta Post/Deni Ghifari)

JAKARTA: The government booked some 149 trillion rupiah (US$9.57bil) in tax revenue in January, a drop of over 8% compared to the same period last year and 7.5% of this year’s full-year target of 1.98 quadrillion rupiah.

“Our tax revenue is still sufficiently positive, although we know that in 2021 and 2022, our tax revenue growth was very high,” Finance Minister Sri Mulyani Indrawati told an online press briefing.

Value-added tax (VAT), employee and corporate income tax together contributed over 50% of the country’s tax revenue in January.

While VAT remained the largest contributor, it dropped 30% to 35.6 trillion rupiah in January from 51.41 trillion rupiah in the same period last year.

Employee income tax was the second-largest contributor, growing 26% year-on-year (y-o-y) to 28.3 trillion rupiah.

Sri Mulyani acknowledged that corporate income tax, which fell over 11% to 18.2 trillion rupiah in January, had seen a weakening trend in recent months.

The minister noted that January’s tax revenue reflected consistent growth of the Indonesian economy as a whole.

Manufacturing and trade still led tax revenue sources, followed by the financial services and construction sectors.

Other income sources, such as customs and excise as well as non-tax revenue, saw a 5% y-o-y drop in January to 22.9 trillion rupiah and 43.3 trillion rupiah, respectively.

The ministry attributed the drop in non-tax revenue to a decline in commodity prices, particularly for oil and coal.

It also said the decline in prices was exacerbated by operational delays in oil and gas projects as well as a decrease in coal production.

The state budget booked an overall surplus of 31.3 trillion rupiah in January, or 0.14% of gross domestic product (GDP), with 215.5 trillion rupiah in total revenue exceeding 184.2 trillion rupiah in spending that contributed to the positive balance.

The first month of this year also saw total debt issuance of 107.6 trillion rupiah, a y-o-y increase of 13% from January 2023.

The ministry said it would continue to monitor the dynamics of global uncertainty while maintaining a flexible, prudent and opportunistic debt financing strategy. — The Jakarta Post/ANN

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