Indonesia rules out medium-term tax hikes, expands tax base

Jakarta (ANTARA) - Indonesia's Finance Minister Purbaya Yudhi Sadewa affirmed that the government has no plans to raise tax rates in the medium term, opting instead to boost state revenue by broadening the tax base.

"Regarding the government's medium-term strategy to strengthen the state revenue base, the tax is rather directed at expanding the base without solely increasing rates," Sadewa said in response to senators in a House of Representatives faction during the 25th Plenary Session in Jakarta on Tuesday.

He explained Indonesian government will expand the tax base by leveraging data and technology to better capture the digital economy, the shadow economy, and the informal sector.

Meanwhile, in the field of customs and excise, he added, the government will strengthen revenue through digitalisation of services and supervision, increased audits and enforcement, as well as eradicating illegal imports and the circulation of illegal excisable goods.

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Those initiatives will be pursued alongside measures to preserve a favorable investment climate, boost exports, and ease business operations.

In the first half of 2026, national tax revenue reached Rp1,035.7 trillion (US$55,5 billion), equivalent to 43.9 percent of the 2026 State Budget target. The figure marked a 24.6 percent increase from the same period last year.

Previously, Minister Sadewa estimated that realised tax revenue throughout 2026 would reach Rp2,310.8 trillion (US$123,9 billion) or approximately 98.8 percent of the 2026 State Budget target of Rp2,357.7 trillion (US$126,5 billion).

Based on his projections, tax revenue is expected to experience a shortfall of approximately Rp46.9 trillion (US$2,5 billion) from the State Budget target. However, this shortfall is much smaller than the 2025 figure of approximately Rp271 trillion (US$14,5 billion).

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Translator: Bayu Saputra, Resinta Sulistiyandari

Editor: Fransiska Ninditya

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