Indonesia\u2019s tax revenue structure is assessed as not yet ideal due to\ndisparities between the contributions of major economic sectors and the\ntax revenues generated. The weakening contribution of the manufacturing\nsector to tax revenues also indicates stagnation in this sector over\nrecent years.<\/p>\n
In 2025, the manufacturing sector contributed 24.6%, or approximately\nRp471.17 trillion, of total tax revenues of Rp1.917.6 trillion. This\ncontribution has tended to decline compared with 2018, which reached\n30%.<\/p>\n
The manufacturing sector\u2019s contribution to gross domestic product\nremains in the range of 18%-19% according to data from the Central\nStatistics Agency (BPS). Meanwhile, the agricultural sector recorded\nsignificant growth of 5.33% in 2025, the highest in the past 10\nyears.<\/p>\n
However, the agricultural sector\u2019s high growth is not proportional to\nits contribution to tax revenues. Over the past five years, the\nagricultural sector\u2019s average contribution to GDP is 12.78%, whilst its\ncontribution to tax revenues is only 1.38%, or approximately Rp26.57\ntrillion in 2025.<\/p>\n
The construction and real estate sectors also show lower\ncontributions to tax revenues compared with their GDP contributions. The\napplication of final income tax is suspected to be the cause of this\nimbalance.<\/p>\n
The Executive Director of the Institute for Development of Economics\nand Finance (Indef), Esther Sri Astuti, acknowledges stagnation in\nIndonesia\u2019s economic structure, where the agricultural sector remains\nthe principal contributor. The manufacturing industry is assessed as\nexperiencing degradation.<\/p>\n
Esther explained that high growth in the manufacturing sector does\nnot reflect growth in labour-intensive sectors. The textile sector, for\ninstance, faces challenges such as expensive raw materials and the\nonslaught of imported products.<\/p>\n
\u201cIn the domestic market as well, we come under attack from a\ncollection of products like those from China, which are far cheaper in\nprice and even better in quality. That is indeed China\u2019s strategy,\u201d\nEsther told Bisnis on Monday, 16 February 2026.<\/p>\n
In addition to import problems, the textile sector faces fundamental\nissues. Esther believes the government needs to attract more investors\nto create an ecosystem from upstream to downstream. According to her,\nthe quality of human resources needs to be improved so that Indonesia\u2019s\ntextile industry can compete with other countries. \u201cIn terms of model,\nfashion, style, we have very few textile schools,\u201d she explained.<\/p>\n
Scepticism over Economic Recovery<\/p>\n
The Center for Indonesia Taxation Analysis (CITA) doubts Finance\nMinister Purbaya Yudhi Sadewa\u2019s claims about economic recovery reflected\nin tax revenue growth of 30.7% year-on-year in January 2026.<\/p>\n
CITA\u2019s Head of Research, Fajry Akbar, believes that the high growth\nis more attributable to a low base effect resulting from Coretax\nproblems in the previous year.<\/p>\n
\u201cI am also puzzled, since last year the government has been so\nreluctant to mention the Coretax problem as one of the causes of the\nplunge in revenues in January 2025,\u201d he told Bisnis on Tuesday, 25\nFebruary 2026.<\/p>\n
Fajry compared tax revenue performance over the past three years and\nfound that tax revenues in January 2026 were lower than in 2023 and\n2024.<\/p>\n
He also highlighted the performance of gross tax revenues in December\n2024 and January-February 2025, which actually increased 1.34%\nyear-on-year, even though gross tax revenues contracted -13%\nyear-on-year in January 2025.<\/p>\n
\u201cIt makes very little sense given the Coretax chaos in January 2025.\nI believe net tax revenues in January 2025, which contracted -41%, more\naccurately reflect the actual conditions,\u201d he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesias-tax-structure-assessed-as-unbalanced-heres-why-1772221994", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }