Tax policy, compliance strategy, and its implications for business and society.
With the government-borne value-added tax (VAT) incentive (DTP) of 100% for the purchase of landed houses and apartments, housing prices can be more affordable so as to stimulate sales for consumers.
The government has extended the final income tax rate of 0.5 percent for UMKM with a turnover of up to IDR 4.8 billion per year. This policy is no longer extended on an annual basis, but is given certainty until 2029.
Finance Minister Purbaya Yudhi Sadewa said that he personally chose not to raise tax rates and focus more on boosting the economy. We will see what the policy direction is going forward.
Finance Minister Sri Mulyani asserted that she will not raise tax rates for 2026 and will focus on intensifying enforcement and increasing taxpayer compliance as an effort to optimize state revenue.
The Ministry of Finance said that the realization of tax revenue from the digital economy reached IDR 40.02 trillion as of 31 July 2025.
Indonesia can improve its taxation ratio by implementing two strategies. First, resolve four fundamental tax problems. Second, close five tax leaks.
Citing 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%).
The government set a tax revenue target in the 2026 Draft State Budget (APBN) of IDR 2,357.7 trillion, up 13.5% from the 2025 tax revenue outlook of IDR 2,076.9 trillion.
CELIOS found a formula to increase taxes by IDR 524 trillion without burdening businesses and society.
Ease of doing business and investment will encourage the fiscal independence of a region. Badung Regency, Bali Province, for example, as much as 91 percent of its regional income derived from PAD cannot be separated from the contribution of the private sector or business actors in paying local taxes.
The government is now preparing a strategy to utilize social media monitoring to detect tax reporting discrepancies.
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