Declining Tax Revenue Sends Mixed Signals for the Economy

Tax revenue has shown a sluggish trend in the early part of this year. Finance Minister Sri Mulyani reported that throughout the first quarter of 2024, tax revenue amounted to Rp 393.91 trillion, or 19.81 percent of the target set in the State Budget (APBN). This figure remains below the normative quarterly target of 25 percent. "The slowdown in tax revenue can be attributed to a significant decrease in commodity prices in 2023, the effects of which are being felt this year," she stated on Apr. 26.

Breaking down the figures, several taxes still fall short of their quarterly targets. The non-oil and gas sector's income tax (PPh) contributed Rp 220.42 trillion, equivalent to 20.73 percent of the target. Meanwhile, the value-added tax (PPN) and luxury goods sales tax amounted to Rp 155.79 trillion, representing 19.20 percent of the target. Land and building tax and other miscellaneous taxes reached Rp 3.17 trillion, making up 8.39 percent of the target. Additionally, income tax derived from the oil and gas sector totaled Rp 14.53 trillion, constituting 19.02 percent of the state budget target.