Page 8 - Indonesia Taxation Quarterly Report (Q4-2019)

INDONESIA TAXATION QUARTERLY REPORT Q4-2019

Executive Summary

Survey of Recent revenue proportion were Domestic VAT,
Developments Corporate Income Tax Article 25/29,
and VAT on Import. In terms of growth,
Individual Income Tax Article 25/29’s
Indonesia has maintained economic growth has convincingly outperformed
growth momentum against a backdrop of other taxes’ growth and accelerated
worsening global economic moderation, significantly based on the cumulative
demonstrating its external resilience. revenue. However, this type of tax only
Economic growth in the last quarter contributed less than 1% of total tax
of 2019 was recorded at 4.97% (yoy), revenue in 2019.
contracted by 1.74% (q-to-q) captured
in the previous quarter. This growth also Furthermore, Indonesia’s ranking in
meant a slight downfall compared to Ease of Doing Business (EoDB) 2020
the growth for the same period last year for Paying Taxes show an improvement
of 5.18%. Cumulatively, total domestic from 112 in the previous report to
th
growth throughout 2019 was recorded 81 . This better performance is mainly
st
at 5.02%, lower than the achievement in supported by the advancement of time
2018 (5.17%). to comply measurement where the time
spent to take care of taxes has declined
Overall economic stability also from 208 hours to 191 hours per year.
contributed to this steady growth aside Notwithstanding the ranking of paying
from the primary support of private taxes, overall score for Indonesia’s EoDB
consumption. Cumulative inflation rate shows the stagnancy.
as one of the indicators, for example,
was recorded at 2.72% (yoy and ytd), For the issue of domestic taxation, the
achieving the 2019 target which was Directorate General of Taxes (DGT) as tax
set at the range of 3.5% ± 1.0%. The authority in Indonesia has commenced
realization of investment at the end of the implementation of the compliance
2019 also exceeded the target of IDR792 risk management (CRM) system for
trillion which rose 12.24% compared to carrying out systematic identification,
2018. In addition, rupiah also continues valuation, ranking and treatment of
to appreciate. tax compliance based on risk. In line

with this, the DGT also has begun to
By the end of 2019, the realization of utilize bank customer account data and
cumulative state revenues reached information to optimize tax revenue
90.40% of the 2019 State Budget considering Law No. 9/2017.
target, grew by 0.69% compared to the
realization in 2018. On the other hand, In terms of Custom and Excise,
state expenditure, which is also a part this sector contributed as much as
of State Budget components, reached IDR213.27 trillion to the state revenue,
93.9% of the target with the annual reaching 102% of 2019 State Budget
growth of 4.4%. target. This is mainly contributed from
excise revenue that reached 80.80% of
The realization of cumulative tax revenue last year target with Tobacco Products
in 2019 only amounted to IDR1,332.1 excise revenue as the dominant source.
trillion or 84.4% of the target which grew
1.43% (yoy), causing the shortfall of In spite of that, the government officially
IDR245.5 trillion. The biggest cumulative increased the excise rates of tobacco

iv