REPUBLIKA.CO.ID, JAKARTA -- Indonesia will find it hard to achieve the economic growth target of 5.4 percent it has set itself in the draft 2018 state budget, the Institute for Development of Economics and Finance (Indef) has predicted.

"The revenue target in the draft 2018 state budget is very ambitious. If the strategy of the tax policy is business as usual, it will be counterproductive to the economy. So, it will not be easy to achieve the target of 5.4 percent if the revenue structure remains the same," Enny Sri Hartati, Indef executive director, said at a press briefing here, Wednesday.

The widening fiscal deficit, which is expected to stimulate the economy, has not encouraged optimum economic performance, partly owing to the high tax receipt target, she noted.

The high tax receipt target will discourage business agents from expanding their businesses, leaving the overall economy stagnant, she remarked.

She also observed that the format of the tax policy's direction remained unchanged, as reflected by the policy to chase tax objects that have been registered.

The policy will not only be counterproductive to the productivity of the real sector, but also will lead to a potential shortfall in state revenues. As a result, the government will tighten the state budget, and the fiscal stimulus will not be optimum, thus raising the possibility of mounting debts and undermining the credibility of the budget, she stressed.

"It must be calculated properly to see the extent to which it has proven effective in providing fiscal stimulus, as part of the effort to boost the economic growth," she mentioned.

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