Taxation, Trust, and the Shadow of Power in Indonesia

Indonesia's tax authority has issued a regulation that permits the involvement of local military and police personnel in gathering information for tax oversight, sparking debate about the intersection of state power and citizen rights. The regulation, outlined in a Directorate General of Taxation circular letter dated July 15, 2026, allows for the development of an information network through various methods, including collaboration with Babinsa (village non-commissioned officers) and Bhabinkamtibmas (community police officers).

The Directorate General of Taxation has since clarified that these personnel will not be granted authority to conduct tax examinations or collect taxes. Their role is strictly limited to coordination and information exchange, a practice the directorate claims has been ongoing for several years. However, this explanation has not fully quelled legal discourse surrounding the policy.

The core issue, according to legal experts, is not who conducts the examinations but how the state structures the relationship between tax administration and its citizens. In Indonesia's legal framework, taxation falls under administrative law, which emphasizes legal certainty and the protection of taxpayers' rights. Any expansion of oversight networks involving institutions outside the direct tax administration needs to be evaluated not only for its effectiveness but also for its adherence to the principles of a law-based state, including legality, proportionality, and accountability.

Babinsa and Bhabinkamtibmas are deeply embedded in community structures, participating in programs ranging from food security and disaster management to environmental and social activities. While their dedication is not in question, their involvement in tax matters raises concerns. Legal scholars argue that when symbols of security become intertwined with tax administration, it can shape public perception in ways that go beyond the substance of the regulation itself. In a self-assessment tax system like Indonesia's, public trust and voluntary compliance are crucial, and the perceived militarization of tax collection could potentially undermine these elements.