Pizza Is Reward for Indonesian Tax Agents Hitting Their Targets

(Bloomberg) -- Indonesian tax offices that hit their collection targets last year were rewarded with pizzas for helping the government boost much-needed revenue in Southeast Asia's largest economy.

Pizzas were delivered to staff at 66 offices after achieving their full targets, Tax Director General Robert Pakpahan told reporters in Jakarta on Friday. A total of 141 tax offices across Indonesia hit 90 percent to 100 percent of their goals.

“It's the way we appreciated them for their efforts,” Pakpahan said.

The tax agency made a big push last year to collect more taxes in a country where compliance is low. It collected 1,201.4 trillion rupiah ($89.5 billion) last year, including from the oil and gas industry and excluding customs and excise duties. That was 93 percent of its budgeted target, and 5.2 percent more than in 2016.

Still, overall government revenue was almost $6 billion lower than expected last year, resulting in a budget deficit of 2.6 percent of gross domestic product, Finance Minister Sri Mulyani Indrawati said on Tuesday. Indonesia lags its peers on revenue collection, a factor that's held back the economy from faster growth and credit-rating upgrades.

Excluding receipts from the tax amnesty program -- which ran from July 2016 to March 2017 and earned the government more than $11 billion -- the growth in tax revenue was even stronger, at 16 percent, Pakpahan said.

For 2018, the government has set an ambitious tax target of 1,386 trillion rupiah. Pakpahan said he is upbeat about achieving it, pointing to a stronger economy and an increase in the number of people paying taxes.

“We're optimistic,” he said. “We've seen the tax compliance ratio increase to 72.6 percent in 2017 from 63.1 percent in 2016.”

To contact the reporter on this story: Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.net.

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Yudith Ho

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