Lebaranomics: A Bountiful Harvest with a Leaking Fiscal Store

Every year as Lebaran (Eid al-Fitr) approaches, two outcomes are certain: congested roads and fully booked hotels. No sophisticated survey is needed to prove this; simply check hotel bookings on travel applications and you will find “sold out” signs at nearly every favourite tourist destination. This is not surprising. It is an annual cycle that can be predicted well in advance.

Yet herein lies the irony. If a surge in tourists is inevitable, then a corresponding surge in local tourism tax revenues should follow proportionally. The reality? Not always. Tax leakage from hotels, restaurants, and parking facilities in tourist destinations continues to recur, becoming a tradition as enduring as the annual homecoming migration itself.

This is what I call Lebaranomics: an economic phenomenon in which the Lebaran moment simultaneously drives travel, consumption, and transactions on a massive scale, yet the fiscal potential has never truly been optimised by local governments.

Let us examine the figures. Data from the Ministry of Transportation recorded that during Lebaran 2025, population movement data based on mobile positioning data (MPD) from three cellular operators reached 154.62 million people, equivalent to 54.89 per cent of Indonesia’s total population. This number exceeded the initial projection of 146.48 million. Total movement recorded during the Lebaran transport period (10 days before until 10 days after Eid) reached 358 million journeys.

The Ministry of Tourism projected that economic circulation during the Lebaran 2025 holiday period could reach Rp375.2 trillion, calculated from an average expenditure of Rp2.57 million per trip by domestic tourists. This money flows into hotels, restaurants, food stalls, tourist attractions, parking areas, souvenirs, and local transport services.

Under Law Number 1 of 2022 on Financial Relations between the Central Government and Local Governments, most of these transactions should be subject to Tax on Certain Goods and Services (PBJT) at a maximum rate of 10 per cent. This means that of every Rp100,000 spent by tourists at a hotel or restaurant, Rp10,000 rightfully belongs to local government coffers.

If only half of this economic circulation comes from sectors subject to PBJT, the tax potential could reach tens of trillions of rupiah within a week. Yet how much actually enters local government accounts? This is a question that is often difficult to answer honestly. The potential is like a bumper harvest, but the fiscal storehouse still leaks.

The most fundamental problem is the tax reporting system that still relies on self-reporting, whereby taxpayers themselves report revenue to local governments. Without adequate transaction verification mechanisms, the incentive to manipulate revenue reports becomes very large, especially when cash transactions dominate and oversight is limited.

This situation becomes particularly acute during Lebaran. Transaction volumes surge dramatically in a short timeframe, whilst the capacity of local tax officials to monitor does not increase accordingly. Under such conditions, revenue leakage becomes almost inevitable. It is not surprising that tax violation cases continue to emerge in various regions. The Pandeglang Tax Office acknowledges that many hotel and food business operators still neglect to pay taxes, whilst in Makassar the local government has had to conduct surprise inspections to penalise hotels, restaurants, and entertainment venues that have fallen behind on their tax obligations.

Various studies show that local tax oversight depends heavily on the use of transaction monitoring technology. A study by Putri et al. (2025) on the application of tapping boxes in Sidoarjo Regency demonstrated that taxes from hotels, restaurants, and parking significantly influence the effectiveness of local tax collection, although success depends heavily on the rate of utilisation of these devices. Another study by Mahibbat and Nurdiono (2024) also noted that the application of tapping boxes significantly influences the level of tax payment compliance in Bandar Lampung City.

For this reason, digitalisation of tax monitoring becomes one of the key solutions to plug leakage gaps. Tools such as tapping boxes, which record transactions in real-time and transmit them instantly to local government servers, can increase transparency in tax reporting. Some cities such as Denpasar and Makassar have implemented them with fairly positive results, whilst Banda Aceh has even targeted the installation of hundreds of units for PBJT taxpayers.

However, the application of this technology remains uneven. Many tourist destinations that experience surges in visits during Lebaran still have limited digital tax infrastructure. It is precisely in such places that the potential for tax leakage is greatest.

Nevertheless, there is light at the end of the tunnel. West Manggarai Regency, the gateway to Labuan Bajo, achieved success in 2025 with hotel tax revenues of Rp78.8 billion, exceeding the target of Rp74.1 billion. Combined with restaurant tax revenue of Rp48.7 billion, total revenues from these sectors reached Rp127.5 billion. This experience demonstrates that when oversight functions properly and local governments take serious action in managing taxes in the tourism sector, fiscal potential can be truly realised.

Lebaran 2026 is just around the corner. The Ministry of Transportation projects movement of 143.9 million people, and as with previous experience, actual figures could exceed projections. Local governments have time to prepare. The question is: do they want to?

Taxes: Not Merely a Levy, but an Instrument of Sustainability

There is a deeper dimension beyond simply optimising revenues. Local tourism taxes, if cleverly designed, can become an instrument for sustaining the tourist destination itself. The concept of earmarking—allocating a portion of tax revenues for specific purposes—has begun to be implemented at the national level, though still in limited fashion. Bali has begun to lead the way in this approach.