Analyst Proposes Indonesia Lower Tax Target Amid Economic Slowdown
Jakarta (ANTARA) - Center for Indonesian Taxation Analysis (CITA) Head of Research Fajry Akbar has proposed that the government lower its tax revenue target while also streamlining spending, amid a continuing weakening of the business climate and public purchasing power.
He argued that such a move is more realistic than continuing to push for revenue optimisation when the tax base has not yet experienced significant improvement.
“If you use ILO (International Labour Organization) data, the average income of workers in Indonesia is the lowest in ASEAN. It is only natural that the tax ratio is also one of the lowest in ASEAN,” Fajry said when contacted in Jakarta on Saturday.
Fajry assessed that an overly high tax revenue target could actually encourage excessive supervision practices towards taxpayers.
According to him, economic growth in the first half of 2026 was largely supported by government spending, so tax supervision should be directed at sectors that directly benefit from that spending.
“What drove the economy in the first half? Mostly government spending. Who enjoys government spending? SPPG entrepreneurs and those related to it. Those are the ones whose taxes should be pursued,” he said.
The statement was made amid the Directorate General of Taxes (DJP) expanding its taxpayer compliance supervision pattern through Circular Letter (SE) Number SE-8/PJ/2026 concerning Guidelines for Taxpayer Compliance Supervision.
In that regulation, the DJP is expanding the use of information technology and the coverage of regional databases down to the village level.
In addition to direct visits, the DJP will now utilise remote sensing technology, web scraping, and build information networks by partnering with Village Development Non-Commissioned Officers (Babinsa) and Community Security and Order Supervisors (Bhabinkamtibmas) to broaden the tax database.
Responding to this supervision method, Fajry noted that the DJP still has to prove that the data obtained later comes from untapped tax revenues. Otherwise, this new pattern risks causing disputes with taxpayers.
“It will certainly create new disputes, especially if the data quality is low or the tax officer has a different interpretation of the data,” he added.
Furthermore, Fajry also commented on the involvement of Babinsa and Bhabinkamtibmas in information gathering. In his view, the DJP needs to clarify what is meant by building information networks and its limitations.
“Unfortunately, this circular letter does not explain what is meant by building this information network, nor what its limits are. On one hand, this creates a militaristic impression in tax revenue collection, which should be a civilian domain. On the other hand, it raises concerns among MSME business actors in rural areas,” he said.
In the first half of 2026, national tax revenue realisation reached Rp1,035.7 trillion, or 43.9 percent of the 2026 state budget target. This achievement grew by 24.6 percent compared to the same period the previous year.
Previously, Finance Minister Purbaya Yudhi Sadewa estimated that tax revenue realisation throughout 2026 would reach Rp2,310.8 trillion, or around 98.8 percent of the 2026 state budget target of Rp2,357.7 trillion.
With this projection, tax revenue is expected to experience a shortfall of approximately Rp46.9 trillion from the initial state budget target. However, this shortfall value is much smaller compared to 2025, which reached around Rp271 trillion.