Economist Urges Realistic Tax Targets Amidst New Oversight Methods

Indonesia's Directorate General of Taxation (DJP) is broadening its tax compliance monitoring by integrating technology and enlisting the help of local military and police personnel. This new strategy, outlined in a directive, aims to expand the tax base by utilizing remote sensing, web scraping, and establishing information networks with village development officers (Babinsa) and community security and order officials (Bhabinkamtibmas).

However, Fajry Akbar, Head of Research at the Center for Indonesian Taxation Analysis (CITA), cautions that this expanded oversight could lead to new disputes with taxpayers. He emphasizes that the DJP must first prove the data collected represents genuinely untapped tax potential. "If the data quality is low or tax officials have different interpretations of the data, it will certainly lead to new disputes," Akbar stated.

Akbar also expressed concern about the involvement of Babinsa and Bhabinkamtibmas in information gathering. He noted that the directive lacks clarity on the scope and limitations of this information network, potentially creating a "militaristic" impression in tax collection, which should be a civilian matter. This approach could also worry small and medium-sized business owners in rural areas.

Amidst a weakening economy and declining public purchasing power, Akbar recommends a more realistic approach. He suggests the government should lower its tax revenue targets and implement spending efficiencies. "If we use ILO data, the average income of workers in Indonesia is the lowest in ASEAN. It's only natural that the tax ratio is also among the lowest in ASEAN," he explained. He further advised that tax collection efforts should prioritize sectors that directly benefit from government spending, citing that first-half 2026 economic growth was largely driven by such expenditures.