Government Unveils Three Fiscal Reforms In 2022 Budget, Here's The Target Sector

Illustration. (Photo: Doc. Between)

JAKARTA - The government through the Ministry of Finance conveyed the direction of fiscal policy 2022 focusing on economic recovery and implementing structural reforms.

Minister of Finance Sri Mulyani said that in order to support fiscal policy next year, three fiscal reforms implemented by the government are summarized in the State Budget Plan (RAPBN).

First, tax sector reform. The government seeks to optimize state revenues, including taxation.

"Efforts to optimize revenues will be pursued through extracting potential and expanding the tax base, improving taxpayer compliance, and optimizing asset management and service innovation," he said while delivering the Macroeconomic Framework and Fiscal Policy Principles of 2022 at the Plenary Meeting of the House of Representatives, Thursday, May 20.

Furthermore, the Minister of Finance explained that tax reform will create a fair and healthy tax system.

"Healthy means effective as a policy instrument, optimal as a source of income, and adaptive to changes in the structure and dynamics of the economy and fair means providing certainty of tax treatment, encouraging voluntary compliance of taxpayers, and creating a balance of tax burdens between income groups and between sectors," he explained.

Second, budgeting reform. The government is working to make improvements through better spending.

"It is done through spending control to be more efficient, productive, and produce a strong multiplier effect on the economy and effective in protecting and improving welfare," he said.

Meanwhile, budget utilization will be focused on supporting priority programs, encouraging efficiency of basic needs, and maintaining results-based budget implementation. Subsidy spending is transformed from commodity-based to human-based to be more effective and on target.

Third, financing implemented through various measures is focused on encouraging flexible, prudent, and innovative financing through strengthening the role of sovereign wealth funds of investment management institutions and special mission vehicles under the Ministry of Finance.

"In addition, the government together with the Financial Services Authority and Bank Indonesia will continue to deepen the financial sector market and control debt prudently," concluded Minister of Finance Sri Mulyani.