Finance Minister: Difficult To Increase Tax Ratio

Jakarta, Sept 21 (ANTARA) - Finance Minister Agus Martowardojo said it would be difficult to increase the tax ratio to 13.5 in 2013 as demanded by the House of Representatives due to current global crisis. "It will be very difficult to increase the ratio from presently 12.7 percent to 13.5 percent because the impact of the world economic crisis has started to affect Indonesia," he said here on Wednesday. He said there had been correction in commodity prices that had affected exports and reduced minerals companies` income to make income tax revenue to drop. To increase the tax ratio to 13.5 percent would mean the government has to increase the tax revenue to up to Rp120 trillion, he said. "The amount would be quite a burden for businessmen or individuals while at present we are just preparing to raise the non-taxable income level to Rp24 million a year that would even reduce income from the tax sector and so the idea of increasing the tax ratio would seem unwise," he said. To make tax income not to drop drastically and target is met the government would continue to extend tax collection by seeking new tax payers. "That is what is to be done and the potential product for it is income tax both corporate and private income tax," he said. He said the government would improve the value-added tax collection system and boost excise income that has so far been one of the biggest tax contributors. Tax director general Fuad Rahmany had earlier said that the impact of the world economic crisis had started to affect tax revenue especially income tax as mining companies and processing industries are facing a decline in demand. He said his office would seek efforts so that future tax income would not rely on big companies whose income is determined by external conditions and influences. "We will seek ways to compensate for the reduction in the tax income from the big tax payers while tax for small businesses has so far been still very small and even the number of small businesses that do not pay taxes is still in million. It is very concerning that our tax income still depends on tax from big companies," he said.