Indonesia's tax revenue to gross domestic product (GDP) position or tax ratio is still low. This ratio needs to be continuously improved so that tax revenues can accelerate.
As shown in the 2026 Draft State Budget (APBN), the government set a tax revenue target of IDR 2,357.7 trillion, an increase of 13.5% over the 2025 tax revenue outlook of IDR 2,076.9 trillion.
Based on the trend from the previous year, tax revenue in Indonesia is unstable. Sometimes it meets the target, sometimes it decreases, thus making Indonesia's tax ratio always at the lowest point when compared to other countries.
According to OECD data, in 2023 Indonesia's tax ratio will reach 12%. This figure is still below other countries, such as Malaysia (13.1%), Singapore (13.7%), China (20.4%), South Korea (28.9%), and Japan (34.4%).
Deputy Director of the Institute for Development of Economics and Finance (Indef) Eko Listiyanto said that the old strategy that the government must finalize to boost taxes is to improve the tax database. Currently, the expansion of the tax database has not been maximized due to the limited data owned by the Directorate General of Taxes.
"To expand the tax database, the Directorate General of Taxes cannot work alone. It must cooperate with third parties, such as banks," Eko told SUAR in Jakarta (20/8/2025).
"To expand the tax database, the Directorate General of Taxes cannot work alone. It must cooperate with third parties, such as banks," said Eko.
He said that so far, the government has only focused on setting tax targets, but has not improved the tax database. In the future, the tax base must first be improved and then set the tax target.
Another strategy to boost tax revenue is to improve the Coretax system. Since its launch in January 2025, this system has not been perfect and has received a lot of criticism.
The implementation of Coretax can run smoothly if it has received data updates from taxpayers.
"The Directorate General of Taxes must be concerned about the Coretax system. The system must work. The required updates can include the taxpayer's address and business type," said Eko.
A new strategy that can be applied by the Directorate General of Taxes in the future so that the revenue target can be on track is to separate individual taxpayers (WP) who have a Taxpayer Identification Number (NPWP) and do not have an NPWP openly. Individual taxpayers who do not have an NPWP will be subject to a higher income tax rate than those who have an NPWP.
But, according to Eko, what happens now is that the Directorate General of Taxes is still not open. There is an incident in a region where an individual taxpayer receives a higher tax rate, even though he already has an NPWP.
Center for Strategic and International Studies (CSIS) researcher Deni Friawan said that the state revenue target was also considered ambitious. The government is targeting a 10% increase in revenue, especially from taxes by 13%.
In fact, according to CSIS, the average tax increase so far has only been around 5%-6%. If the target is not achieved, the shortfall has the potential to be covered through new debt - which only intensifies fiscal pressure.
"Only 17 million out of 155 million workers pay taxes. Our tax base is still very narrow, so it is difficult to force an increase in revenue in a short time," Deni said.
Benedictus Krisna Yogatama
Executive Director of the Indonesian Employers Association (Apindo) Danang Girindrawardana said that the government needs to provide tax policies that are acceptable to the business world. For example, providing tax relaxation to priority sectors that have contributed greatly to state revenue.
"The government must sort out which sectors can be given tax relaxation and can discuss with the business world," he told SUAR in Jakarta (20/8).
National economic performance
Finance Minister Sri Mulyani Indrawati said that the tax revenue target of IDR 2,357.7 trillion in the 2026 Draft State Budget has taken into account the projected improved national economic performance, tax sustainability, challenges and potential.
The value of IDR 2,357.7 trillion includes an income tax (PPh) revenue target of IDR 1,209.4 trillion, which is up 15% compared to last year. Then, value added tax (VAT) and sales tax on luxury goods (STLG) of IDR 995.3 trillion, up 11.7% from last year.
The land and building tax (PBB) revenue target for 2026 is IDR 26.1 trillion, down 13.1%. Other taxes are targeted at IDR 126.9 trillion. Then, the government is also targeting customs and excise revenues which will reach Rp 334.3 trillion next year.
To achieve the customs and excise revenue target, the government is preparing a number of measures. First, to encourage policies related to tobacco products and the extension of excisable goods.
Secondly, the government will also intensify import duties on international trade. Making the export duty policy to support downstream products. Finally, the government will also enforce the law and eradicate the circulation of illegal excisable goods and smuggling.
