RI-US Trade Agreement Risks To Reduce State Revenue

JAKARTA - Economic Policy Analyst of the Indonesian Employers' Association (Apindo) Ajub Hamdani assessed that the trade agreement between Indonesia and the United States had a different impact on three parties, namely the state, the private sector, and the community.

For information, US President Donald Trump has announced that Indonesian goods entering the US will still be subject to a reciprocal rate from the previous 32 percent to 19 percent, while goods from the US to Indonesia are not known tariffs.

Ajib said that the most crucial impact was actually felt by the state, where this 0 percent tariff policy has the potential to reduce state revenues in terms of taxation and customs.

In fact, he continued, this year's state revenue is targeted to reach IDR 3,600 trillion, with a structure that relies heavily on three main components, namely taxes, excise, and Non-Tax State Revenue (PNBP) and is currently facing pressure.

"In the fiscal context, we can imagine that our target this year is IDR 3600 trillion, our APBN is already projected to be IDR 600 trillion in debt, our structure is received from 3 main things, one tax, two excise and three PNBP," he told VOI, Thursday, July 17.

He explained that PNBP has the potential to contract by Rp80 trillion due to its separation from Danantara from the state revenue system, while excise revenues, especially from the cigarette sector, also show a significant decline.

Meanwhile, in terms of taxes, he conveyed that even before Indonesia's trade agreement with the US, Apindo had projected the potential for tax shortfall of up to Rp120 trillion from the target of Rp2,180 trillion.

"This means that with conditions like this, it is necessary to recalculate how much potential short fall tax is and how much potential short fall state revenue is," he said.

According to him, if the current conditions are not mitigated with a mature fiscal strategy, state revenues will decrease and the government will face two difficult options by the end of the year, namely increasing debt by having to be maintained below 3 percent of GDP or cutting spending on ministries and institutions.

He hopes that fiscal mitigation of the impact of this agreement will soon be designed from now on, so that economic stability and fiscal sustainability will be maintained until the end of the year.

"So our hope is that this policy will be followed by mitigation with our better fiscal policy from now on. Don't know later that entrepreneurs are being chased again. So why is the effect now? Now, if we look at it now. We sell online, we think taxes are 0.5 percent," he said.

"Well, the point is like this. The government needs to design more comprehensively how the policy policy does not arrive when it comes to thinking like that, but then it is designed how even the fiscal policy is safe because of the context of policy problems with America," he added.

Ajib menyampaikan dari sudut sektor swasta, khususnya pelaku usaha yang mengekspor ke Amerika Serikat, kesepakatan ini memberikan kepastian dan stabilitas dalam proyeksi ekonomi.

Sedangkan dari sisi masyarakat, ia menyampaikan bahwa kebijakan ini menguntungkan karena produk-produk impor dari AS akan menjadi lebih murah akibat tarif bea masuk yang kini 0 persen.

Ajib conveyed that from the private sector's point of view, especially business actors who export to the United States, this agreement provides certainty and stability in economic projections.

Meanwhile, from the community side, he said that this policy was profitable because imported products from the US would be cheaper due to import duty rates, which are now 0 percent.