In the 2017 State Budget (APBN), the government targeted tax revenue of Rp 1.49 quadrillion (thousand trillion), a 2.62 percent decrease from the 2016 Revised State Budget (APBNP) of Rp 1.54 quadrillion. This year's targeted tax revenue is expected to contribute 85.63 percent to total state revenue of Rp 1.75 quadrillion.
Income tax (PPh) remains the largest contributor to the 2017 APBN, amounting to Rp 787.7 trillion or 52.6 percent of total tax revenue. The second largest contribution comes from value-added tax (PPN) at Rp 493.9 trillion or 33 percent, followed by excise duties at Rp 157.2 trillion or approximately 10.5 percent. The remainder comes from land and building tax (PBB), export duties, and other taxes.
To increase tax revenue, the government plans to spin off the Directorate General of Taxes (Ditjen Pajak) from the Ministry of Finance. After the spin-off, the Ditjen Pajak will become a new tax agency directly responsible to the president. This separation plan has been discussed since 2014, with a target implementation date of 2018.
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