Luhut: Coretax reforms could boost tax ratio to 14%

National Economic Council (DEN) Chairman Luhut B binsar Pandjait stated that reforms to the Coretax system could increase Indonesia’s tax ratio to 14%. He cited government digital integration as key to strengthening oversight and expanding the tax base, especially among micro, small, and medium enterprises (MSMEs) that have historically not been fully registered in the national tax system.

“If Coretax is improved, I believe the number of MSME taxpayers will increase substantially, and the tax ratio could rise from below 9% to 13-14% over time,” Luhut said at the DEN office in Jakarta on Tuesday, 26 May 2026.

He also relayed to Deputy Finance Minister Suahasil Nazara that higher tax payments could allow the government to reduce MSME tax rates, thereby boosting the economy.

Finance Minister Purbaya Yudhi Sadew confirmed that the Core tax system has been improved, despite widespread criticism. He noted that annual Tax Return filings have reached 13 million taxpayers, 10 million of whom are individual taxpayers.

“This demonstrates a positive impact from Coretax, with individual taxpayers up 83% alongside economic improvements,” Purbaya said in an APBN KITA release on Tuesday, 5 May 2026.

“Coretax shows progress despite its weaknesses,” he added. Purbaya assured that further refinements are underway, expressing confidence in their clear impact on state revenue.