Minister Of Finance Sri Mulyani: Taxes Can Support IDR 502 Trillion Energy Subsidy

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

JAKARTA - Minister of Finance Sri Mulyani Indrawati said that tax revenues support government subsidies given to the public amid rising food and energy commodity prices.

"This year the government provides subsidies of more than IDR 502 trillion only for energy, namely fuel, pertalite, 3 kg LPG, electricity, and diesel. This is because state finances are supported and can only remain healthy and sustainable if sufficient taxes are collected," said the Minister of Finance. in the webinar “Tax Talking”, quoted from Antara, Thursday, August 18.

The subsidy is given to maintain people's purchasing power so as not to be affected by global inflation caused by supply disruptions due to the geopolitical conflict between Russia and Ukraine. Thus, the economic recovery from the impact of COVID-19 can also continue.

The government also continues to carry out tax reforms based on Law Number 7 of 2021 concerning Harmonization of Tax Regulations, which was issued in 2021.

These laws include, among others, the basis for the Voluntary Disclosure Program, the Trade tax through the Electronic System, the co-financing technology-based financial company tax (fintech), and the increase in Value Added Tax (VAT) rates.

"This is all done so that we are able to restore state finances, after more than two years of working extraordinarily hard to protect the people and the economy from the impact of COVID-19," he said.

Previously, Sri Mulyani said that tax revenues until the end of July 2022 reached Rp1,213.5 trillion, an increase of 58.8 percent from the same period the previous year due to rising commodity prices, expansive economic growth, a low 2021 revenue base, and the implementation of the Voluntary Disclosure Program. (PPS).