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Despite tax shortfall Indonesia 2017 customs  excise target met

Despite tax shortfall Indonesia 2017 customs excise target met

JAKARTA: A closer look at the data show that import taxes in the 1 January 2017 – 28 December 2017 period reached IDR 34.58 trillion (approx. USD $2.6 billion), or 103.9 percent of the government’s full-year target. Excise taxes reached IDR 150.81 trillion (approx. USD $11.2 billion), or 98.4 percent of the target, while export taxes reached IDR 3.97 trillion (approx. USD $294 million), or 146.9 percent of the target.

What caused this good performance? Firstly, both the domestic and global economy strengthening in 2017, hence import and export activities rose. This encourages the accumulation of more import and export taxes. Regarding export taxes, the relaxation of strict export rules in the mining sector contributed sharply to rising export tax revenue, specifically in the minerals and coal mining sector. For example, Freeport Indonesia, the local unit of mining giant Freeport McMoran Inc, was granted a permit to export 1.11 million wet metric tons of copper concentrate until February 2018. Secondly, Indonesia’s cigarette manufacturers were quicker to fulfill their excise obligations this year. This has a big impact on excise revenue because these cigarette companies are the biggest contributors to excise revenue. In 2016 a total of IDR 178.7 trillion was collected in customs and excise revenue, equal to 97.2 percent of the government’s target last year.