Interior Minister Drives Digital Innovation for Local Tax Payment Systems to Achieve Fiscal Independence

Indonesia’s Interior Minister (Mendagri) Muhammad Tito Karnavian is pushing for digital innovation in local tax payment systems to strengthen regional original revenue (PAD) and achieve fiscal independence.

He explained that the payment system will be integrated online with a mechanism resembling the operation of Bank Indonesia’s Quick Response Code Indonesian Standard (QRIS).

“At the national level, I have already spoken with the BI Governor. He is creating a system like QRIS, but online. So later it can connect with all local governments so that it can be directly received by the regional revenue body,” Tito explained in a press release received by Kompas.com on Monday (9 March 2026).

In efforts to increase PAD, he emphasised that local governments should not impose new tax burdens on the public.

According to Tito, consumers have actually been paying taxes every time they transact at hotels, restaurants, and cafes. However, these taxes are first collected by business owners as tax collectors.

“The question is, does that money reach the regional revenue body in the same amount as it was collected?” he said during the closing event of the Kepri Ramadan Fair 2026 at the Dekranasda Building grounds in Tanjungpinang, Riau Islands, on Sunday (8 March 2026).

Through the integrated online digital payment system, Tito hopes that tax paid by consumers can directly enter the local government account without first being collected by business owners.

He believes this innovation will not only prevent revenue leakage but also significantly increase PAD.

Tito also cited the success of Badung Regency, Bali, which has achieved fiscal independence with PAD supported by the tourism sector, particularly hotels and restaurants.

According to him, this has kept Badung Regency financially strong even though there has been a reduction in transfer funds to regions (TKD) from the central government.

“If such a system can be created, whether nationally or as a regional initiative, please go ahead. The point is, there is no leakage, PAD will be strong so that the region can be fiscally independent,” Tito concluded.