Aiming For Shadow Economy, Hashim Said The State Budget Will Not Experience A Deficit Again

Rupiah (Photo: Antara)

JAKARTA - Special Envoy for the President for Climate and Energy, Hashim Djojohadikusumo, said that the government will increase state revenue, one of which is by targeting shadow economic activity or shadow economy.

Hashim said that there is an unregistered or known portion of the shadow economy in Indonesia which reaches 25 percent to 30 percent of Gross Domestic Product (GDP).

"I said, we actually have an economy of Rp. 22,000 trillion, plus 25 percent to 30 percent. We actually, Indonesia's economy is currently Rp. 27,000 trillion to Rp. 28,000 trillion. But 25 percent are not recorded. Because there are naughty ones. But many do not have bank accounts. Many of our people do not have bank accounts," he said in CNBC Indonesia Economic Outlook 2024, Wednesday, February 26.

Hashim believes that if the government manages to optimize state revenue from shadow economic activity, the ratio of state revenues can reach 18 percent.

According to the calculation, there will be at least an additional IDR 900 trillion in state revenue per year if the government succeeds in taxing shadow economic activity so that state finances will no longer experience a deficit.

"What does that mean? We won't have a budget deficit anymore. We will budget surplus, but we have to do it as well as possible," he explained.

Hashim said President Prabowo Subianto would have a new program to increase state revenues.

However, Hashim did not explain in detail regarding the program to increase the ratio of state revenues.

Hashim explained that the program will be led by Deputy Minister of Finance (Wamenkeu) Anggito Abhimanyu.

"There is one new thing, this is a program to increase our revenue ratio. This has not been discussed, our revenue ratio will be improved soon. This program is led by Mr. Anggito Abimanyu," he said.

Hashim said that with the new program, Indonesia's state revenue ratio will be equivalent to Cambodia's country at the level of 18 percent of GDP.

In fact, according to him, in the long term, the ratio of state revenues is targeted to be like Vietnam, which reaches 23 percent of GDP.

"Our target is that we refer to the Revenue Ratio of Cambodia, which is 18 percent according to the World Bank. Later we will target 23 percent, that's Vietnam. World Bank, I have met the World Bank seven times. I myself am with the team. They say it is very likely that Indonesia is the same as Cambodia at the level of 18 percent," said Hashim.