The global economy's future prospects are considered not good. Future economic uncertainty is indicated by high inflation spikes, high and volatile commodity prices, and prolonged wars. This situation led to an increase in interest rates and liquidity tightening which in turn resulted in a tightening in US dollar value.
This condition must be monitored because the global economic slowdown and rising interest rates trend will affect indicators and factors that drive Indonesia's economic growth. In this regard, the government will maintain vigilance while remaining optimistic about economic recovery. This was stated by Minister of Finance Sri Mulyani at the October 2022 State Budget Press Conference on Friday, 21 October 2022.
In the midst of global economic uncertainty, the monetary policy response was to raise interest rates and tighten liquidity in order to stabilize prices. As the biggest contributor to state revenues, tax policy certainly has an important impact on Indonesian economy.
Tax policy during the pandemic has undergone several changes, such as tax incentive policies to support national economic recovery with expanding the tax base in Harmonization of Tax Regulations Law. As the pandemic is getting under control, the question of whether or not to continue the incentive policy arises. In response, Sri Mulyani stated that government would not change much of the existing tax policy in the future.
"We may not change many tax policies and so forth in a very uncertain situation, we will try to observe from our economic recovery.... We will tend to maintain a steady pace from our economy, which is currently in a good and positive momentum, and the State Budget is also in a positive position. However, we will continue to remain vigilant from an uncertain global environment, " Sri Mulyani explained.
In uncertain conditions, government attempt to maintain people's purchasing power. Head of Fiscal Policy Agency, Febrio Nathan Kacaribu, further explained that tax policy implementation that had been postponed would still be prepared and perfected. This is accomplished by considering the current state of global uncertainty and its impact on the Indonesian economy.
"We also pay attention to uncertainty condition, which is still very high both globally and its impact on our economy, so we will pay attention to the right timing for the minimum possible impact as well as the most effective preparation possible when we will implement it," said Febrio.
