Indonesia's Tax Office Aims to Boost Tax Ratio Through Compliance and Base Expansion

Indonesia's tax ratio, a key indicator of fiscal health, registered 11.8% in 2024, a slight decrease from the previous year and a position that ranks low among 38 OECD nations. Only Timor Leste and Bangladesh reported lower ratios.

Despite the challenging figures, the Directorate General of Taxes (DJP) remains optimistic about increasing the tax ratio. Inge Diana Rismawati, Head of the DJP's Taxpayer Relations Sub-directorate, stated that opportunities remain open through expanding the tax base and strengthening taxpayer compliance. She noted that tax ratios are influenced by various factors, including economic structure, business formalization, compliance levels, and fiscal system design, advising a comprehensive comparison of national tax ratios.

The DJP is focusing on building a robust, fair, and sustainable tax system rather than solely short-term revenue increases. Key initiatives include digitalization of tax administration, enhanced data integration, improved services, risk-based supervision, and fostering voluntary compliance. The goal is to bring more economic activities into the tax system, ensuring contributions align with regulations.

In the first half of 2026, tax revenue reached approximately Rp 1.035.7 trillion, marking a 24.6% year-on-year increase. This growth is attributed to improved economic activity, increased compliance, and ongoing tax administration reforms, such as the Coretax implementation. The full-year tax revenue projection for 2026 is set at 98.8% of the state budget target, reflecting a prudent approach based on economic conditions and mid-year revenue realization.