Collecting Wealth Tax from Officials Could Boost State Revenue by Rp752 Billion

A study by the Center of Economic and Law Studies (CELIOS) in its report on Indonesia’s Economic Inequality 2026 reveals a potential state revenue of Rp752.32 billion from a wealth tax imposed on public officials. The breakdown includes Rp8.86 billion from DPD RI members, Rp232.62 billion from DPR RI members, and Rp510.84 billion from the Merah Putih Cabinet.

“Economic inequality cannot be viewed solely through large entrepreneurs, as wealth often aligns with political power,” stated CELIOS on Wednesday (29/4/2026).

The concept of a wealth tax has long been discussed as an alternative progressive annual levy based on an individual’s total assets minus liabilities.

Various countries have implemented wealth taxes, including Colombia, Argentina, Bolivia, and Norway, which maintain such systems to this day. A more aggressive wealth tax targeting ultra-wealthy individuals can complement the income tax system effectively.

“Wealth tax is categorised as a progressive tax because the burden is relatively heavier on the wealthy group compared to regressive taxes that burden the poor.”

The potential for wealth tax could be optimised with a threshold or minimum levy limit of Rp84 billion to Rp506 billion at a progressive rate of 1%, and wealth above Rp506 billion at a 2% rate.

Based on CELIOS data, the potential wealth tax from DPD RI members using this progressive rate reaches Rp8.86 billion from total wealth of Rp885.78 billion.

Meanwhile, for DPR RI members, the tax is divided into two groups: officials with assets above Rp506 billion totalling Rp7.09 trillion in wealth, and the group with wealth between Rp84 billion and Rp506 billion totalling Rp9.07 trillion.

With a 2% rate for the first group and 1% for the second, the total potential wealth tax from DPR RI members amounts to Rp232.62 billion.

Furthermore, for the Merah Putih Cabinet members, it is also divided into two groups: officials with assets above Rp506 billion totalling Rp22.89 trillion in wealth, and the group with wealth between Rp84 billion and Rp506 billion totalling Rp5.29 trillion.

With a 2% rate for the first group and 1% for the second, the total potential wealth tax from Cabinet members amounts to Rp510.84 billion. Overall, the potential wealth tax revenue from public officials is Rp752.32 billion per year.

The imposition of a wealth tax would have the most concrete impact of increasing state revenue, thereby thickening the national budget to serve as a buffer against shocks, such as those currently occurring amid economic uncertainties from external factors.

“Tax revenue would increase significantly, meaning the government could raise spending budgets for social protection functions without increasing existing tax rates. During crises, a wealth tax can also serve as a fiscal shock absorber,” wrote CELIOS.

The wealth tax is supported by the public, according to CELIOS results. A CELIOS survey on public perceptions of wealth tax also received high support. The majority of the public agrees if a wealth tax is implemented in Indonesia.

The majority of respondents also believe that a wealth tax can reduce economic inequality between social classes.

For information, in the first quarter of 2026, tax revenue consisted of Corporate Income Tax (PPh) at Rp43.3 trillion. Personal Income Tax and PPh 21 was recorded at Rp61.3 trillion, up 15.8%. Meanwhile, final PPh 22 and PPh 26 was Rp76.7 trillion, up 5.1%.

“Amid widening inequality, the state actually has room to extract greater contributions from the top group, not from ordinary people who are already burdened,” emphasised CELIOS.