A Precipitous State Budget

THE government seemed oblivious to a looming budget crisis as it continues to apply unrealistic assumptions in the draft revision of the 2016 state budget. Spurred by the highly ambitious growth target of 5.3 percent, the tax revenue target was set at Rp1.527 quadrillion-clearly a tall order given the sluggish domestic economy.

After the International Monetary Fund (IMF) corrected its projection of Indonesia's growth to 4.9 percent, the government finally lowered its target to 5.2 percent, but strangely enough, the tax revenue projection remained the same.

June 21, 2016