pro-visioner.com– This Country Depends on Taxes , We are indeed a large and resource-rich country-but it is on taxes that the survival of this country depends.
has it ever occurred to you that since when has our country actually depended on tax revenue to finance its needs? In fact, Indonesia is very famous for its abundant natural resources, from the land and waters as well as its contents all contain a large amount of natural resources.
The author is not just spouting a made-up statement. There are several facts that corroborate the statement. Let’s take a look at the following infographics and explanations.
As reported on the CNBC Indonesia news page (https://www.cnbcindonesia.com/market/20190815165123-17-92302/kejayaan-minyak-yang-padam-ninabobo-bbm-yang-manjakan-ri) it turns out, in the past Indonesia’s oil production was quite large. Since it began to be exploited in 1966, oil production from the bowels of Mother Earth continued to accelerate, reaching its peak in 1977. At that time, Indonesia’s oil production reached 1.68 million barrels / day.
It can be said that the heyday of the country’s oil and gas industry occurred in the 70s until the start of the 21st century (early 2000s). At that time, Indonesia’s oil production continued to be above the level of 1.2 million barrels/day. Even in the period 1962-2008, Indonesia was included in the Organization of Petroleum Exporting Countries (OPEC). In addition, until 2003, Indonesia was also still listed as a net oil exporter. This means that Indonesia’s oil balance is still dominated by exports, while imports are smaller. This condition makes Indonesia benefit from petroleum in trade.
In fact, Indonesia is not a country with large oil reserves. Based on data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia’s oil reserves are only 0.02 percent of the world’s total oil reserves. If it continues to be siphoned off, Indonesia’s oil will run out in the not too distant future.
But there are things that make Indonesia so eager to develop the oil industry. One of them is the global oil crisis. The Organization of Petroleum Exporting Countries (OPEC) in the Middle East tightened oil production as an act of boycott against Israel starting in 1973. Then came the event commonly known as the Oil Boom. The price of crude oil on the world market, which in the early 1970s was only around US$1.7/barrel, skyrocketed to US$12/barrel-an increase of almost 10 times.
This soaring oil price made industry players flock to boost production. Drilling fields were opened, and new oil reserves were discovered. The price of oil continued to rise at that time, even in 1996 the price of oil had reached US$23/barrel. It’s no wonder then that Indonesia’s oil industry took off and enjoyed a huge profit mix.
Today, Indonesia’s oil boom is fading. Starting in the late 90s, Indonesia’s oil production continued to decline. In fact, by the end of 2007, oil production could no longer reach 1 million barrels/day. As of the end of 2018, Indonesia’s crude oil production was only 772.25 thousand barrels/day. This downward trend is also still continuing.
The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) predicts that this downward trend will continue at least until 2050. This can happen because of the condition of oil wells that are getting older. The longer it is sucked, the oil production in a well naturally decreases. In addition, in recent years, no new large oil reserves have been found. As a result, Indonesia’s oil production is predicted to be only 513.87 thousand barrels/day in 2026, the lowest level since 1996.
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That way, fuel imports will flow even faster in the future. Looking back, Indonesia only enjoyed the heyday of the oil industry for 20 years. This is inseparable from the fact that Indonesia is not an oil-rich country (remember Indonesia’s oil reserves are only 0.02 percent of the world’s total reserves).
Unfortunately, Indonesians still have the mindset that we are rich in oil. As a result, there is an understanding among the public that fuel prices must be cheap. “We are rich in oil.”
The government also seemed to support this stigma. With various subsidy mixes, the government has succeeded in making fuel prices for retail consumers very cheap. At least since 2006, the government has always allocated substantial funds for fuel subsidies. On average during the 2006-2004 period, the portion of fuel subsidies to the total state budget was 11.2 percent. Imagine, a tenth of the government budget is only used to keep fuel prices low for the public!
Now, returning to the author’s question at the beginning of the article, since when did taxes become the main foundation of this nation in collecting state revenues, the author immediately searched for data and information about the state budget since the PELITA (Five-Year Development) era during the leadership of President Soeharto until the current era (see the tax revenue table 1969/1970-1988/1989).
If this is a milestone, it appears that tax revenues were less significant from the PELITA I to PELITA IV era but increased gradually. In the 1990s, tax revenue touched Rp 11 trillion.
Now we compare it with state revenue in the oil and gas sector (see the table of oil and gas revenue and non-oil revenue 1969/1970-1988/1989).
It turns out that state revenue in the oil and gas sector became excellent when entering PELITA II (tax revenue below oil and gas revenue). This condition lasted until the 1990s, precisely in 1987/1988. At that time tax revenues began to take over oil and gas revenues. Data from the Ministry of Finance’s website on the APBN from 1969 to 2000 also proves this (see the table of allocations and realization of the APBN 1969-2000).
Furthermore, tax revenues started to cross the thousand trillion mark since 2012 (see the summary table of the 2011-2015 State Budget).
And in 2000 until now, it is evident that the dominance of tax revenue is very high in the APBN and its realization (LKPP / Central Government Financial Report).
Thus, this article is made again to realize the majority of people in this country that, without intending to underestimate other potentials, in fact our country is very dependent on tax revenues exceeding non-tax revenues, such as from natural resources, dividends from BUMN, and other PNBP. There is no need to debate or claim that there are real alternative non-tax sectors that the government can rely on to fill the void in the state treasury.
