Business – While failing to meet the target set out in the state budget, the government in 2015 collected more taxes than ever before.

As of Dec. 25, the Tax Office recorded Rp 1 quadrillion (US$73 billion) in tax revenue, exceeding the full-year 2014 figure of Rp 982 trillion.

Nevertheless, 2015 tax collection will fall far short of the targeted Rp 1.294 quadrillion, a failure that prompted Tax Office head Sigit Priadi Pramudito to step down from his position on Dec. 1.

University of Indonesia taxation expert Darussalam applauded the government's achievement on tax revenue, saying that the results showed that the tax office had been trying hard to meet the target despite sluggish economic growth.

"This is the first time in Indonesian history to have tax revenue of Rp 1 quadrillion. The main drivers are tax administration reforms and tax facilities, such as the tax discount on asset revaluation," he told TheJakartaPost.com on Monday night.

According to Darussalam, President Joko "Jokowi" Widodo's administration had set an unrealistic target for tax collection.

"It's unrealistic, because the 2015 target of Rp 1.294 quadrillion was set more than 31 percent above the realized 2014 tax revenues, while average tax revenue growth in the past was only 12 to 15 percent," he said.

He added that the Tax Office performance should not be judged solely on achieving targets, but also on the services provided and on its success in encouraging taxpayers' compliance with regulations.

"So that the authorities and the taxpayers do not have to spend time and resources to solve tax disputes that could actually be settled through regulations providing greater clarity," he said.

2016 target

Darussalam called on the government to revise the 2016 tax revenue target to a more realistic level, after this year's ambitious target proved to be far from reality. In the 2016 state budget, the government has set itself a tax revenue target of Rp 1.36 quadrillion.

"The figure is not realistic, since it is up 25 percent from 2015's tax realization, considering, once again, that tax growth in the past was only 12 to 15 percent," he said.

However, to meet next year's target, Darussalam recommended transforming the Tax Office into a semi-autonomous revenue authority (SARA), an institution directly under the President's supervision, and at the same time providing more tax facilities.

Earlier, Finance Minister Bambang Brodjonegoro said he was optimistic that 2015 tax revenue would grow to Rp 1.1 quadrillion, or 85 percent of the target. State-owned banks have been instructed to keep open tax payment services for their clients until 9 p.m on Dec. 31.

He expected tax revenue to improve at the end of the year thanks to asset revaluation at state-owned enterprises, banks and developing companies. In addition, the government would closely watch its 50 biggest taxpayers from the oil and gas sector. (ami/ags)

Source: http://www.thejakartapost.com/news/2015/12/29/2015-sees-highest-ever-tax-revenues.html