JAKARTA - Indonesia's parliament on Tuesday approved revisions to the 2016 state budget, including a wider fiscal deficit of 2.35% of gross domestic product (GDP), compared with 2.15% in the original spending plan.
Along with the revised budget, parliament also approved the government's proposal to cut diesel subsidies to 500 rupiah ($0.04) per litre starting July 1, in a move to reallocate money to productive spending.
Parliament gave the green-light for the government to increase the capital of 21 state firms, but rejected proposed injections to three unlisted firms.
Among firms to get injections are builder Wijaya Karya , Pembangunan Perumahan, toll road operator Jasa Marga, steel producer Krakatau Steel and electricity utility Perusahaan Listrik Negara.
The revised 2016 budget assumes that an amnesty programme to collect tax on previously-untaxed assets held by Indonesians outside and inside the country will generate 165 trillion rupiah ($12.44 billion) of state revenue by the end of 2016.
Shortly before endorsing the revised budget, parliament approved the tax amnesty bill.
The new law calls for the amnesty programme to start immediately, and last until the end of March 2017.
Parliament and the government negotiated on rates that amnesty participants will pay. The rates will be 2-5% for those who declare and repatriate assets back home and those with assets already at home. The redemption tariffs for assets kept abroad are between 4% and 10%.
The draft revision to Indonesia's 2016 state budget assumes that such an amnesty programme to collect tax on previously-untaxed assets held by Indonesians outside and inside the country will generate 165 trillion rupiah ($12.44 billion) of state revenue by the end of 2016.