JAKARTA, June 1 (Reuters) - Indonesia has secured a $400 million loan from the World Bank to help finance its fiscal deficit and improve tax collection, the World Bank and the finance minister said on Wednesday.
The loan was aimed at supporting policy and institutional reforms to improve revenue collection and spending, the World Bank Group said in a statement.
Minister Bambang Brodjonegoro told Reuters the loan would be used to improve the tax office's information technology as well as to help finance the 2016 budget deficit, which is expected to swell from the planned 2.2 percent of gross domestic product (GDP).
The World Bank said Indonesia collected less than half its potential tax revenue. Its tax-to-GDP ratio in 2015 was merely 10.8 percent.
"Fiscal reforms will allow the government to allocate more funds to programmes that will directly benefit the poor," Rodrigo Chaves, World Bank Country Director for Indonesia, said in the statement.
Indonesia is banking on a tax amnesty programme, currently being debated in parliament, to boost tax collection this year.
(Reporting by Gayatri Suroyo; Writing by Fransiska Nangoy) ((Fransiska.Nangoy@thomsonreuters.com; +62 21 2992 7610; Reuters Messaging: fransiska.nangoy.thomsonreuters.com@reuters.net))
The loan was aimed at supporting policy and institutional reforms to improve revenue collection and spending, the World Bank Group said in a statement.
Minister Bambang Brodjonegoro told Reuters the loan would be used to improve the tax office's information technology as well as to help finance the 2016 budget deficit, which is expected to swell from the planned 2.2 percent of gross domestic product (GDP).
The World Bank said Indonesia collected less than half its potential tax revenue. Its tax-to-GDP ratio in 2015 was merely 10.8 percent.
"Fiscal reforms will allow the government to allocate more funds to programmes that will directly benefit the poor," Rodrigo Chaves, World Bank Country Director for Indonesia, said in the statement.
Indonesia is banking on a tax amnesty programme, currently being debated in parliament, to boost tax collection this year.
(Reporting by Gayatri Suroyo; Writing by Fransiska Nangoy) ((Fransiska.Nangoy@thomsonreuters.com; +62 21 2992 7610; Reuters Messaging: fransiska.nangoy.thomsonreuters.com@reuters.net))
