JAKARTA, Jan 13 (Reuters) – Indonesia’s budget deficit this year is expected to narrow to 4.3% of gross domestic product, less than the 4.85% originally forecast, media reported, quoting the head of the country’s Fiscal Policy Office of the Ministry of Finance.

A lower budget deficit means the government could lower its bond issuance target for 2022.

An upward trend in commodity prices already provided Southeast Asia’s largest economy with windfall revenues last year, helping the government sharply cut the 2021 budget deficit to 4, 65% of GDP, against a gap of 5.7% approved by parliament. Read more

Finance Ministry official Febrio Kacaribu told a briefing that new tax measures passed in October, such as higher value added tax, a higher tax rate for high earners, the cancellation of the corporate tax cut and a tax amnesty program would boost revenue collection in 2022, media reported.

The government also expected a stronger economic recovery from the COVID-19 pandemic and high commodity prices to support the 2022 tax levies, Febrio said.

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Reporting by Gayatri Suroyo; Editing by Martin Petty

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