Jusuf Kalla, Vice President of Indonesia
The President and I Have Good Chemistry

The amended 2016 state budget and the law on tax amnesty were passed by the House of Representatives (DPR) on June 28. Vice President Jusuf Kalla said the tax amnesty was the government's attempt to cover the 2.48 percent deficit in the budget. The global economic crisis has caused state revenues to decline, including those from taxes. In response, the government decided to slash the budget by Rp50 trillion.

"Then there's the tax amnesty to add to revenues," said Kalla. He hesitated to say whether he was optimistic or pessimistic on the results of the tax amnesty, which is expected to add some Rp165 trillion to the current budget. If the attempt fails and the deficit reaches 3 percent, the government, said Kalla, will discuss the problem with the DPR, given that the law on state finances regulates that the deficit should not be more than 3 percent of gross domestic product (GDP). "So, there are only two solutions: reduce spending or raise the deficit," said 74-year-old Kalla.

July 12, 2016