In the 2016 Revised State Budget (APBN-P), the government targeted tax revenue of Rp 1,539.2 trillion. The largest source of tax revenue in 2016 was projected to come from income tax at 55.6 percent (Rp 855.8 trillion), followed by value-added tax at 30.8 percent, and excise duties at 9.6 percent.
This tax revenue target is considered overly optimistic by analysts due to its reliance on high growth targets. This concern is not unfounded, as tax revenue realization in the previous two years consistently fell short of targets.
In 2014, tax revenue realization reached 92 percent of the APBN-P 2014 target; similarly, in 2015, it only reached 83 percent of the APBN-P 2015 target. The fall in commodity prices, stemming from weak demand and economic slowdown across all sectors, makes it difficult for 2016 tax revenue to reach its target.
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