The Sources of Government Revenue – Have you ever considered where the country has the funds or income from? Then, have you also ever thought about where the funds will come from if the state builds a station, stadium, or other state facilities?
The answer is from the sources of government revenue or Sumber Keuangan Negara (from now on abbreviated as SKN). What is SKN? SKN of the Republic of Indonesia is everything related to income and expenditure owned by the Indonesian state.
You need to know that this SKN will significantly affect the Indonesian economy. It turns out that SKN comes from sources inside and outside the country! Thus, the SKN becomes the basis for making the State Revenue and Expenditure Budget (APBN).
With the APBN, the government must be able to manage finances properly and carefully because it will have a long-term impact on the people of Indonesia.
Do you want to know what SKN is? Come on, let's take a look at it carefully!
The Sources of Government Revenue You Should Know
The Sources of Government Revenue from Inside the Country
Retribution is a charge or levy made by the local government following local regulations. You need to know that the withdrawal of retribution is coercive. However, the payer is given something directly from the local government.
Examples include levies for city transportation terminals, street parking, government-owned health services, and building permits.
The government uses fiscal policy instruments to finance development through tax collection. The law about taxes has been stated in the constitution that everyone should pay taxes; business entities and individuals must contribute to the state by paying taxes. Thus, taxes are coercive.
The primary income used for the welfare of the people is taxes, so taxes are the largest source of state income. Although the tax is coercive, the taxpayer does not get a direct reward.
About taxes, examples of taxes are the Mining Tax on the Value of Goods and Services (PPN), Land and Building Tax (PBB), Income Tax (PPh), Motor Vehicle Tax (PKB), Sales Tax on Luxury Goods (PPn-BM ), Advertising Tax, Hotel and Restaurant Tax (PHR), and many more.
This form of law enforcement aims to discipline the public, FYI, since it is related to finances. The government has set this form of law enforcement of paying fines or asset confiscations for those who defy the law.
Examples of fines and confiscations include confiscating illegal goods, penalties for traffic violations, and fines for late payment of taxes.
4. State-Owned Enterprises/Regionally-Owned Enterprises (SOEs/ROEs)
We are already familiar with State-Owned Enterprises and Regionally-Owned Enterprises or SOEs and ROEs. Well, in SKN, the government has two large business units to increase state income, namely State-Owned Enterprises, or SOEs, and Regionally-Owned Enterprises, or ROEs. Part of the profits of the business entity will give a portion of the profits of the business entity to the government.
In addition to meeting the needs of people's lives, the purpose of the existence of government-owned enterprises is to control commodity prices so that capital owners do not control them.
Then, what are the examples of SOEs? For instance, PT Pertamina, PT Telkom, PT Garuda Indonesia, Bulog, PT Balai Pustaka, Local Water Supply Utility (PDAM), and many more.
Well, these companies may sound like they could be more familiar to us. However, we may often use their services in our daily life!
5. Gifts, Grants and Donations
Both from within and outside the country, the Indonesian government, can receive gifts, grants, and donations from various parties as revenue sources. Don't worry. These gifts, annuities, and contributions are not like loans that must return with interest.
Then, the number of gifts, grants, and donations cannot be ascertained because it depends on the party who gave them.
Well, to be clear, examples of gifts, grants, and donations are donations for natural disaster management from abroad, land grants from individuals to the government, and many more.
The government can also borrow money from within and outside the country. It is usually done when there is a deficit. What is a deficit?
A deficit is a condition in which a country or organization experiences more expenditure than its income. When making this loan, the government must issue the interest set by the related party.
Sources of loans can be obtained from individuals, banking institutions, and others.
7. Money Printing
One way for the government to cover the deficit is to print more money. However, we cannot do it randomly. The government must control the amount of money printed to avoid inflation. What is inflation?
In short, inflation is an increase in the price of goods and services continuously within a certain period of time.
8. Running A Prize Draw
The government can also organize a prize draw with an institution or company as the executor. So, what are the benefits for the government?
The government gets a profit in the form of a difference from the receipt of the prize minus the operational costs of the winner's prize. For example, the government will profit from a prize draw that PT Pertamina gives money of Rp50,000,000.00 to several outstanding students in Indonesia.
The Sources of Government Revenue from Outside the Country
1. Project Loans
For those who don't know what a project loan is, a project loan is a loan that mostly comes from a reaction to project loan commitments from previous years. The government will likely ask for project loans when a deficit occurs.
2. Program Loans
Meanwhile, program loans are funds that are entirely issued from foreign parties that can be disbursed in the form of money so that people can use it for development.
Well, how? Now, you finally know where this country gets its financial sources from, right? Hopefully, you found this article useful. Also, don't forget to use the Whiz Money Management App from now on because of its advantages, OK?