The government has set a tax revenue target in the Draft State Budget (APBN) 2026 of IDR 2,357.7 trillion, an increase of 13.5% from the 2025 tax revenue outlook of IDR 2,076.9 trillion.
While the target reflects the government’s optimism about stronger economic performance, experts warn it will require extraordinary effort and careful execution to avoid unsettling the business climate.
Prianto Budi Saptono, Executive Director of the Tax Research Institute (TRI), stated that the government must devise careful planning and strategies to ensure that tax revenues meet the target.
First, he urged the Directorate General of Taxes (DJP) to fully maximize tax extensification and intensification. Extensification involves monitoring individuals and entities that meet objective criteria but do not yet have a taxpayer identification number (NPWP), while intensification focuses on improving tax collection from already registered taxpayers.
Prianto said that if these efforts are fully maximized, half of the tax revenue target could be achieved.
Second, he stressed the need for tighter monitoring of value-added tax (VAT) and income tax (PPh). While VAT compliance is relatively easier to track, he said, PPh remains the hardest to pursue because many taxpayers still evade it. He recommended stronger enforcement, including fines for those who refuse to pay.
Third, Prianto pointed to the urgent need to fix the Core Tax Administration System (Coretax), which has faced repeated technical problems since its rollout on January 1, 2025. “Tax payments in January 2025 fell 41 percent due to Coretax issues. We must make sure this does not happen again,” he said.
“Tax payments in January 2025 fell by 41% due to problems with Coretax; we must ensure that this situation does not happen again in the future,” he said to Suar in Jakarta on August 19.
He also recommended that the DJP engage business actors through outreach programs and professional consulting services to ease compliance and help ensure the target increase does not disrupt economic activity.
Business leaders agree that expanding the tax base could be effective. Shinta Kamdani, chairperson of the Indonesian Employers Association (Apindo), suggested targeting the “shadow economy”- economic activities that contribute to GDP but remain outside official records.
“Extensification through the shadow economy can be an effective way to boost tax revenue,” she told Suar in Jakarta on August 19, 2025.
She said that there is still a lot of shadow economy potential out there that can be optimized.
Considerations for the target
Finance Minister Sri Mulyani stated that the tax revenue target of Rp 2,357.7 trillion in the 2026 Draft State Budget (RAPBN) has taken into account the projected improvement in national economic performance, tax sustainability, as well as challenges and potentials.
The amount of Rp 2,357.7 trillion includes an income tax (PPh) target of Rp 1,209.4 trillion, up 15 percent compared to the previous year. Value-added tax (VAT) and luxury goods sales tax (PPnBM) are targeted at Rp 995.3 trillion, an increase of 11.7 percent from the previous year. Property tax (PBB) for 2026 is targeted at Rp 26.1 trillion, down 13.1 percent. Other taxes are targeted at Rp 126.9 trillion.
Next, the government also targets customs and excise revenue to reach IDR 334.3 trillion next year.
To achieve this customs and excise revenue target, the government has prepared several measures. First, promoting policies related to tobacco products and extending excise coverage.
In addition, the government will intensify import duties on international trade and use export duties to support product downstreaming.
Finally, the government will enforce laws and combat the circulation of illegal excise goods and smuggling.
