Jakarta – The government must carefully review its plan to increase this year's target for non-oil-and-gas tax revenue amid signs of weakening purchasing power, a business association has said.
"The government can set a [new] target. However, it has to consider the current business climate and whether the people's purchasing power will allow meeting the target," Indonesian Retailers Association (Aprindo) deputy chairman Tutum Rahanta said Friday, as quoted by kontan.co.id.
Finance Minister Sri Mulyani Indrawati recently announced that the ministry had increased the target for non-oil and gas tax revenue by Rp 20 trillion (US$1.5 billion) in the draft for the revised 2017 state budget.
Tutum said people's purchasing power was currently weakening, as indicated in the sales performance during the recent Idul Fitri holiday season, which failed to meet business expectations.
He said the government had to take some action to boost purchasing power. "We hope the government has certain action that can boost economic conditions, otherwise they should not set a high target," Tutum said.
Tax collection in the first six months of the year is up 10.4 percent compared to the same period of last year, according to the Directorate General of Taxation. However, the first-half realization only represents 39 percent of this year's tax target, which is set at Rp 1.31 quadrillion. (dis/hwa)