Finance Minister: Tax Revenue Remains Strong in February 2023

Finance Minister Sri Mulyani (Photo by: PR of Cabinet Secretariat/Rahmat)

Tax revenue remained very strong this February with a realization of Rp279.98 trillion or 16.3 percent of the 2023 State Budget target and a growth of 40.35 percent, Finance Minister Sri Mulyani has said.

This amount is contributed by the non-oil and gas income tax with Rp137.09 trillion, VAT and luxury tax with Rp128.27 trillion, land and building tax and other taxes with Rp1.95 trillion, and oil and gas income tax with Rp12.67 trillion.

The tax revenue performance in the first two months of 2023 was influenced by commodity prices that remained higher than those in January and February 2022, continuously improving economic activities, and impacts of the implementation of the Law on Harmonization of Tax Regulations (HPP).

“Those are three factors of very good tax revenue growth. We certainly continue to be vigilant although [the tax revenue] remains very good as of this February because the global situation is currently not stable nor good. Thus, we must be vigilant,” the Minister said as quoted from the website of Ministry of Finance, Thursday (03/16).

Sri Mulyani pointed out that all types of taxes experienced a dominant positive cumulative net growth.

Income tax article 21 revenue grew by 21.4 percent as it was strongly supported by workforce utilization and wages, showing companies’ ability to provide additional income to their workers.

Personal income tax revenue increased by 22.3 percent thanks to the annual income tax payment; corporate income tax revenue rose by 33.8 percent in line with an increasing deposit growth, especially in the financial service and insurance sector; and domestic VAT saw a good growth as domestic consumption increased and the HPP Law began to be implemented.

In the meantime, final income tax revenue contracted in February since Voluntary Disclosure Program policy implemented last year is no longer in force this year.

Income tax article 22 and VAT revenues for imported goods also slowed down in February as import activities decreased from January.

As for sectoral revenues, all major factors grew positively. The processing industry saw a growth with the automotive industry and oil refinery industry being the largest contributors. The trade industry also grew and the largest contributor was the machinery, equipment, and other equipment trading industry.

The financial sector had a strong growth, supported by an increase in interest rates and banking credit distribution. Likewise, the mining sector performed well as commodity prices remained stable, including coal.

The construction and real estate sectors grew drastically by 37.5 percent, demonstrating activities with the largest multiplier effect in terms of job creation.

Meanwhile, the transportation and warehousing sectors, coupled with people’s activities, are returning to normal with a skyrocketing growth of 60.5 percent.

“These sectors were affected by the scarring effect. Now they are having a great recovery,” Sri Mulyani remarked. (UN) (DH/MMB)