Indonesia to tighten belt amid lower tax revenue outlook

"Ultimately, the president wants to change the paradigm of the budget," Cabinet Secretary Pramono Anung said at the State Palace in Jakarta on Monday.

 

Other issues on the agenda for the meeting were the ease of doing business in Indonesia, the so-called one-map policy and the Indonesian hostage situation in the Philippines, Pramono said.

 

Regarding the revised state budget, Pramono continued, President Joko "Jokowi" Widodo had urged Cabinet members to increase efficiency in their respective budgets, underlining that the allocation of state funds had to follow ministries' programs rather than preset allocations.

 

Finance Minister Bambang Brodjonegoro added that the government had included a cut in government spending in its draft bill for a revised state budget, along with the tax amnesty.

 

The government, he added, expected the House of Representatives to pass tax amnesty bill in April, so that the revised budget could be submitted in May.

 

"There will be efficiency programs on spending, both at ministries and regional government, as well as with regard to subsidies. Even if the tax amnesty [bill] is passed, efficiency in spending will be beneficial. It is part of our commitment to maintain a healthy and well-targeted budget," he explained.

 

Coordinating Economic Minister Darmin Nasution added that he would report on the progress of simplifying business procedures. Meanwhile, the one-map policy aims to resolve disagreements resulting from the use of different data and maps that often cause land disputes and overlapping permits for plantations and mining operations.

 

In the World Bank's 2016 edition of the Doing Business index, Indonesia ranks 109th among 189 countries in terms of the ease of doing business, lagging behind neighbouring economies Singapore (1st), Malaysia (18th), Thailand (49th) and Vietnam