The government’s plan to cut corporate income tax rate gradually from 25% to 17% is predicted to affect the tax revenue in 2017. Contribution for tax revenue from corporate income tax may drop by 20% to 32%. The government needs to think of other countries as revenue sources to cover the potential cut.
Tax observer Kristiaji Bawono said that the corporate income tax rate contribution to tax revenue was quite significant, which is 35% to 40%. If the contribution dropped below 30% when the target of tax revenue continued to rise, then the government should look for alternative sources of income. “There is still a weakness in tax extension on the other sectors. So, the government should really calculate,” he said.
One of the extension efforts is expanding the taxpayer base with tax amnesty program which is currently held by the government. By the tax amnesty, the tax object which has not been recorded will enter into the database of Directorate General of Tax after the taxpayer declared his wealth.
In 2015, the corporate income tax revenue realization reached 185.2 trillion IDR. Based on the target of tax revenue in the APBN 2016 worth 1.308 trillion IDR, the corporate income tax contribution is estimated to reach 457.8 trillion IDR to 523.2 trillion IDR. (*)
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