Director general of tax lists economic impacts of COVID-19

Jakarta Director General of Tax, Ministry of Finance, Suryo Utomo, on Tuesday listed three major outcomes of the coronavirus pandemic which have triggered an economic crisis in Indonesia.

“The economic turmoil caused by the COVID-19 pandemic has hit Indonesia like a perfect storm that has (had) at least three major impacts on the economy,” he said, while commemorating the 2020 Tax Day, themed ‘Rising Together with Tax with Mutual Cooperation Spirit’, in Jakarta.

The first impact of the pandemic has been a steep decline in household consumption, or purchasing power, which accounts for 60 percent of the nation’s gross domestic product (GDP).

This is evidenced by data from the Central Statistics Agency (BPS), which shows that household consumption fell from 5.02 percent in the first quarter of 2019 to 2.84 percent in the first quarter of this year.

The second impact of the pandemic has been prolonged uncertainty that has weakened investment and has had implications on business continuity, Suryo pointed out.

The third impact has been the global economic slowdown, which has caused commodity prices to slide and Indonesia’s exports to several countries to cease, he noted.

According to Suryo, the economic turmoil caused by COVID-19 has had an historic impact on the management of the country’s finances as it has led to the revision of the State Budget twice, as part of efforts to recover the economy.

Not only that, the economic pressure has also had implications on tax revenue, which, until the first half of 2020 reached Rp513.65 trillion, or 44.02 percent of the target of Rp1,198.8 trillion set by Presidential Decree (Perpres) 72 of 2020. Tax revenue contracted 12.01 percent (yoy) from Rp604.3 trillion collected in the same period of last year.

“The weakening of businesses and slowing of economic growth in the second quarter of 2020 occurred deep enough so it also (had an) impact on our tax revenues,” Suryo said.

On the other hand, he said, he is optimistic that economic recovery will begin from the third and fourth quarters, and one of the reasons for that would be increased synergy between the government and taxpayers (taxpayers), who dutifully pay taxes.

“We certainly hope that economic growth in Indonesia returns to positive growth in the third quarter and beyond,” he said.

 

Source: Antara News