‘Good progress’ on Indonesia tax amnesty, but expenditure still an issue: Nomura

SINGAPORE (Sept 19): Nomura is maintaining its 2016 fiscal deficit forecast for Indonesia at 2.9% of GDP despite noting “good progress” of the nation’s recent tax amnesty deal.

In a Friday report, research analysts Euben Paracuelles and Lavanya Venkateswaran highlight that although no revenue assumptions from the amnesty were factored in for Nomura’s previous fiscal deficit forecast of 2.9% of GDP, the estimate has remained unchanged to imply its assumptions on the expenditure side will be “relatively unaffected”.

In their estimates, they have also taken into consideration “significant shortfalls in tax revenue collections relative to the budget” – as actual year-to-date collections are down 2.2% y-o-y in the seven months to July, which suggest the full-year turn-out could be tracking even lower.

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