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George Russell

The Indonesian finance minister has urged taxpayers to help prop up the country's pandemic-stricken finances, state media reported on Monday.

“Why do we pay taxes? This is supposed to protect Indonesia ”, Sri Mulyani Indrawati was quoted by the Antara news agency.

Indonesia is projected to have a budget deficit of 6.4 percent of gross domestic product in 2020 and a deficit of 5.8 percent in 2021.

Last week, Ms. Indrawati said the country's tax target of Rp1,405 billion (USD 100 billion) could not be achieved due to the pressure on revenues from the Covid-19 pandemic.

Ms. Indrawati appealed to taxpayers at an online Treasury Department event in Jakarta on Monday, saying, "The money is being raised so that Indonesia can run again."

A woman looks at a painting at an exhibition in Ubud, Bali. The local government has encouraged artists to keep working during the pandemic

She said tax revenue for January through September was only 63 percent of the nine-month target.

Indonesia's limited government revenues are likely to hamper the country's recovery from the pandemic.

"As in most other emerging markets, the Indonesian government's spending capacity is limited by its low revenue pool and increased borrowing costs," Fitch said in a report last week.

"As a result, the government provided a relatively small stimulus package of 2.7 percent of GDP in 2020, compared to 16.1 percent in neighboring Singapore," added the rating agency.

On November 11, Indonesia signed a $ 1.09 billion loan agreement with Australia to help the Southeast Asian country respond to the pandemic.

"Everyone, all parts of society, are affected by this Covid-19, and the role of fiscal policy along with other instruments such as monetary policy is very critical in this difficult time," said Ms. Indrawati when announcing the loan.