Tax Revenue Projected to Grow 2.6% in 2021

The Ministry of Finance (Kemenkeu) notes that tax revenue is projected to grow positively by 2.6% to Rp 1,229.6 trillion in 2021. This growth is in line with the improving economic outlook and continued support for tax administration reform.

From 2016 to 2019, tax revenue experienced continuous positive growth averaging 6.4%. This growth was influenced, among other things, by improved economic performance and prices of major commodities.

Recorded tax revenue in 2016 amounted to Rp 1,106 trillion. Tax revenue grew by 4.1% to Rp 1,151 trillion in 2017.

In 2018, tax revenue grew by 14.1% to Rp 1,313.3 trillion. A year later, tax revenue grew again by 1.5% to Rp 1,332.7 trillion.

Meanwhile, in 2020, tax revenue contracted by 10% to Rp 1,198.8 trillion. This was due to the impact of the economic slowdown and the provision of incentives due to the Covid-19 pandemic. Nevertheless, tax revenue is projected to grow again to Rp 1,229.6 trillion in 2021.

Tax revenue this year will be supported by the positive performance of Income Tax (PPh), Value Added Tax (PPN), and Sales Tax on Luxury Goods (PPnBM) revenue, which are projected to increase. PPh this year is expected to grow by 2%, supported by the recovery of commodity prices.

Meanwhile, PPN and PPnBM are projected to grow by 2.2% this year. This is in line with the improving economic outlook, improved tax administration, and the implementation of tax on electronic system trading (PSME).