Awaiting the Achievement of Tax Revenue in December

As the saying goes “time flies so fast”. The speed is increasing when the Covid-19 pandemic hits the world. People’s mobility is limited, daily activities are reduced and some of today’s jobs can be done from home, making the day by day, time by time go faster. Unknowingly, the last month, December has arrived as a sign that 2021 is coming to an end and 2022 is about to begin.

December is the month most people look forward to. Christians will celebrate Christmas this month. Many workers look forward to getting year-end bonuses from where they work. Some people choose December for a vacation, considering that this month there are many holidays. There are also those who are waiting for the “End Year Sale”, a big discount for warehouse cleaning held by various product providers. For those who feel less fortunate in that year, December seems to be the exit door to welcome new luck in the following year.

While for most others, December will be a busy month. Those who are involved in the world of tourism such as hotels, restaurants and accommodation are prepared to receive more guests than usual and face the “Peak Season” considering that December is the time that most people choose to vacation. In addition, for those who work with annual targets, December will be the arena of an all-out struggle in order to fulfill the targets so that the targets for that year can be achieved. The same is true for the Directorate General of Taxes (DGT).

As the backbone of state revenue, DGT certainly has targets that must be achieved every year. This year, the target for state revenue from the tax sector is IDR 1,229.6 trillion as stated in the State Budget (APBN). The amount that is not small becomes the work reference of all work units in DGT. Until the end of November, DGT has been able to collect more than Rp1,082 trillion or around 88% of the tax revenue target. Thus, in December 2021, DGT will have to fight hard to get another 12% in order to achieve tax revenue.

Tax Receipt in December

If viewed historically through the Ministry of Finance’s Performance Report (LAKIN) in the last three years, the available data shows that December is the month of the highest tax contributor. In 2018, of the total tax target of around Rp. 1,424 trillion, in December of that year it contributed Rp. 179.27 trillion or around 12.59%. Meanwhile, in the following year, December 2019 contributed Rp195.93 trillion or 12.42% of the total tax target of around Rp1,577 trillion. And in 2020, December contributed Rp144.64 trillion or 12.06% of the tax target of around Rp1,198 trillion.

December seems to be both a burden and a hope for DGT considering that this month is the last month. On the other hand, December was also the month for the highest tax contributor, at least in the previous three years.

Budget Absorption and Synergy

One of the main reasons why December is the month for the highest tax contributor is the absorption of the budget by government work units. Since performance-based budgeting has been implemented in government agencies in Indonesia, budget absorption has become one of the benchmarks for assessing performance. A good agency is an agency that has absorbed its entire budget into various projects, facilities and activities in accordance with the provisions of laws and regulations.

In December, each agency will try to absorb the entire remaining budget, both the December budget and the remaining budget in the previous months. The budget is then allocated through capital expenditures, personnel expenditures and goods expenditures. In the process of government spending activities, each government treasurer is obliged to withhold or collect taxes in accordance with tax provisions. In December, with high budget absorption, government spending also increased. With increased spending, the obligation to withhold or collect taxes also increased in December.

Through the Self Assessment scheme applied in Indonesian taxation, all taxpayers, including the government treasurer, should carry out all their obligations without waiting for the tax assessment letter issued by the DGT. It is at this moment in December that the DGT must focus on overseeing the obligations of government treasurers to ensure that the withholding or collection and payment of taxes carried out is in accordance with tax provisions. The synergy between the DGT and the government treasurer is the key to the success of tax revenue in December.