Finance Minister Sri Mulyani Indrawati told a media briefing that Indonesia is poised to reach its tax revenue target this year for the first time in over a decade as business activities recover from the impact of the coronaviruses.
By the end of October, the government had collected 953.6 trillion rupiah, or 78 per cent of the target, according to Sri Mulyani.
That was a rise of 15.3 per cent from the same period last year.
The economic recovery is reflected by higher commodity prices and increased tax collections, according to Sri Mulyani, who told the virtual briefing that businesses can now pay taxes again as their activities improve.
She said that the higher revenues are a step toward fiscal consolidation by the year 2023.
The fiscal deficit will be below 3 per cent of GDP by the year 2023 in order to comply with current law.
In January to October, the deficit was 3.29 per cent of GDP, according to Sri Mulyani. The GDP deficit is expected to be 5.7 per cent by the year 2021, according to the government.
Finance Ministry senior official Luky Alfirman told the Finance Ministry that the revenue collection could mean Indonesia won't have to sell bonds this year to finance the 2022 budget.
Our budget condition is very good, so we may not do pre-funding, but we are not closing the door to this option, he said.
In 2021, full-year economic growth is expected to be between 3.5 per cent and 4 per cent, compared to an earlier estimate of 4 per cent growth.
The third quarter growth came in below expectations at 3.51 per cent due to COVID 19 curbs in July and August, but Sri Mulyani said consumption was improving as the government eases mobility restrictions.