Indonesia’s Tax Revenue Grows by 58.1 Percent as of August 2022

Photo by: PR of Ministry of Finance

The Government has announced that the tax revenue as of August 2022 reached Rp1,171.8 trillion or grew by 58.1 percent.

This performance was influenced by the upward trend in commodity prices, expansionary economic growth, and a low base in 2021 due to the provision of fiscal incentives and the impact of the implementation of the Law on Harmonization of Tax Regulations (HPP).

“The growth of tax revenues up to August was at 58.1 percent or Rp1,171 trillion with state budget target [according to Presidential Regulation Number 98 of 2022] of Rp1,485 trillion,” the Director General of Taxes of Ministry of Finance Suryo Utomo said as quoted from the official website of the Ministry, Thursday (10/06).

In detail, Suryo stated that non-oil and gas income tax (PPh) contributed 88.3 percent to the total target or Rp661.5 trillion, while the VAT (PPN) and the luxury tax (PPnBM) are at 69.1 percent or Rp441.6 trillion. Oil and gas income tax recorded revenue of Rp55.4 trillion or 85.6 percent of the target and land and building tax (PBB) and other taxes contributed 40 percent of the target or Rp13.2 trillion.

All types of taxes, he said, also experienced a dominant positive cumulative net growth as income tax article 21 grew by 21.4 percent; income tax article 22 grew by 149.2 percent; personal income tax grew by 11.2 percent; corporate income tax grew by 131.5 percent; income tax article 25 grew by 17.2 percent; final income tax grew by 77.1 percent; Domestic VAT grew by 41.2 percent; and VAT for imported goods grew by 48.9 percent.

For sectoral revenues, all major sectors grew positively, supported by rising commodity prices, economic recovery, and the policy mix, including phasing-out fiscal incentives, implementation of the HPP Law, and compensation for fuel. Several sectors as the largest contributors were the manufacturing industry at 29.7 percent (grew by 49.4 percent), the trading sector at 23.7 percent (grew by 66.3 percent), financial and insurance services at 10.9 percent (grew by 15.2 percent), mining sector at 8.9 percent (grew by 233.8 percent), and construction and real estate sector at 4.1 percent (grew by 10 percent).

In his press statement, Suryo also mentioned the implementation of the HPP Law is part of tax reform in the country. “On the HPP Law, some of these are parts of the policy reform we put in the HPP Law,” he said.

For the record, on VAT on Trade through the Electronic System (PMSE), 127 appointed business players managed to collect VAT revenues of Rp8.17 trillion. This amount constitutes the payment in 2020 of Rp730 billion, the payment in 2021 of Rp3.9 trillion, and the payment in 2022 of Rp3.54 trillion.

On Fintech Tax which took effect on May 1, 2022, and began to be paid in June 2022, the income tax article 23 on loan interest received by domestic taxpayers and permanent business entities (BUT) reached Rp74.44 billion and the income tax article 26 received by foreign taxpayers or BUT was recorded at Rp32.81 billion.

On Crypto Tax which was effective from May 1, 2022, and began to be paid in June 2022, the income tax article 22 on crypto asset transactions through domestic PMSE operators and self-deposits was at Rp60.76 billion and domestic VAT for collection by non-treasurers was at Rp65.99 billion.

Finally, due to the impact of the VAT rate adjustment starting April 1, 2022, there was an increase in VAT revenues of Rp1.96 trillion in April 2022, Rp5.74 trillion in May 2022, Rp6.25 trillion in June 2022, Rp7.15 trillion in July 2022, and Rp7.28 trillion in August 2022. (PR of Ministry of Finance/UN) (FI/MMB)