Trying To Improve Tax Ratio, Minister Of Finance Sri Mulyani Hopes Indonesia Will Soon Get Credit Rating 'Single A'

Minister of Finance, Sri Mulyani Indrawati. (Photo: Doc. Ministry of Finance)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani Indrawati hopes that Indonesia can immediately reach the credit rating of single A, one of which is by improving the tax ratio.

"One of the ways to become a single A is if we can improve the tax ratio and it must be hard work, and deepening from our market," Sri Mulyani said at the Commission XI Working Meeting of the DPR RI in Jakarta, quoted from Antara, Friday, June 7.

For information, the rating of state credit or sovereign credit rating is a measure of the government's ability to pay debts.

Recently, the rating agencies Fitch and Moody's maintained Indonesia's credit ratings in the positions of BBB and Baa2. The two institutions both assess Indonesia's outlook in a stable position.

In March, the Japan Credit Rating Agency (JCR) also maintained Indonesia's credit rating at the BBB+ level with a stable outlook. Then in 2023, Standard & Poor (S&P) maintained Indonesia's credit rating at the BBB level with a stable outlook.

Although she has not yet reached single A, Sri Mulyani said that Indonesia's current credit rating achievement is relatively positive and stable even though the domestic economy was hit by the COVID-19 pandemic, commodity prices rose and fell, to spending to build infrastructure.

According to him, this achievement is also an achievement. In fact, he added, other countries have experienced a decline in credit rankings not only in developing countries but also countries that are considered triple A, double A, or single A.

Indonesia with a triple B stable is a good achievement. This means that there are so many shock turbulence destinations, Indonesia is still considered prudent fiscal management, good, and it is confirmed with its credit rating and outlook," he said.

Based on Sri Mulyani's presentation, referring to data from the Ministry of Finance (Kemenkeu), the ratio of the total government debt to GDP in April 2024 was 36.5 percent. This means that it is still far below the maximum 60 percent of GDP.

The ratio of Government Securities (SBN) to GDP in April 2024 was at 32.1 percent, while the loan to GDP ratio was 4.4 percent in the same period.

Previously, the ratio of the total government's debt to GDP reached 39.2 percent in 2023. Then 39.7 percent in 2022 and 40.7 percent in 2021.

Meanwhile, in nominal terms, the central government's total debt in April 2024 reached IDR 8,338 trillion, consisting of loans of IDR 1,005 trillion with a portion of 12.1 percent and SBN of IDR 7,333 trillion with a portion of 87.9 percent.

There are still many people who are worried about Indonesia's debt because they see its magnitude. But compared to many other countries, Malaysia in this case is even 60 percent (the ratio of the government's total debt to GDP in 2022)," said Sri Mulyani.