Sri Mulyani's Subordinates Open Up The State Budget Management Strategy So That It Doesn't Get Worse

JAKARTA - The government through the Ministry of Finance (Kemenkeu) is said to have prepared a special strategy to narrow the deficit space in the State Revenue and Expenditure Budget (APBN).

Deputy Minister of Finance (Wamenkeu) Suahasil Nazara explained that there are two ways to reduce the fiscal deficit to 3 percent of gross domestic product (GDP) in 2023. First, increase the state revenue side. Second, sharpen spending to make it more effective and on target.

"This method must inevitably be carried out in the context of fiscal consolidation to maintain the sustainability of the medium-long term APBN," he said in an official statement, quoted Friday, October 15.

According to Suahasil, the government is optimistic that there will be an increase in state revenues in line with the tax reform efforts being intensified.

“This is of course a structural reform whose effect is not in the short term, the effect is long term. Changing the working landscape of the Indonesian economy," he said.

The representative from Sri Mulyani also revealed that structural reforms need to be continued to build a stronger and more sustainable recovery foundation. This can be seen through the stipulation of the Law on the Harmonization of Tax Regulations (UU HPP) which is expected to encourage a fair, healthy, effective, and accountable taxation system.

"We hope that the tax reform will create a strong tax base, a sustainable tax base, which in turn will create good growth in the state budget, a healthy state budget," he said.

Suahasil added that a good revenue base was built through a strong tax system. Through a strong tax system, he continued, we can build a healthier state budget, adequate state revenues, and be able to spend money on things needed by the state.

"The task of the State Budget is to perform the allocation function, especially to allocate to public goods. The distribution function, redistributes income, and performs a stabilization function for economic growth and economic stability. A healthy state budget will be the basis for better future economic growth," he explained.

To note, in the 2021 APBN Law it is stated that the budget deficit is believed to reach IDR 1.006,4 trillion or 5.7 percent of GDP.

As for next year, the 2022 State Budget Law explains that the deficit is projected to be in the range of IDR 868.02 trillion or 4.85 percent of GDP.

Meanwhile, for 2023, the APBN is required to return to normal levels with the amount of the deficit not exceeding 3 percent of GDP. The mandate is contained in Law (UU) Number 2 of 2020 concerning State Finance.