OECD: Indonesia's Tax Collection Capacity Ranks Third Lowest in Asia-Pacific

Indonesia ranked third lowest among countries in Asia and the Pacific for tax collection performance in 2024, measured by the tax-to-GDP ratio recorded by the Organisation for Economic Co-operation and Development (OECD).

According to the OECD report titled ‘Revenue Statistics in Asia and the Pacific 2026’, Indonesia’s tax-to-GDP ratio was 11.8%, placing it third from the bottom out of 38 countries surveyed. Indonesia’s tax performance was only slightly better than Timor-Leste (10%) and Bangladesh (6.7%).

Indonesia’s tax-to-GDP ratio figure is below the average tax ratio in the Asia-Pacific region, which was 19.7% in 2024. It also remains below the average when compared to other regions. For comparison, the average tax-to-GDP ratio in Latin America and the Caribbean (LAC) and the OECD was 21.7% and 34.1% respectively in 2024. The similar average in Africa was 16.1% in 2023.

Sixteen of the 38 countries had a tax-to-GDP ratio above the Asia-Pacific average, and 23 of the Asian countries covered in the report had a tax-to-GDP ratio above the regional average: Japan (33.7%, 2023 figure), Mongolia (29.5%), Maldives (26.3%), Korea (25.3%), Georgia (25.0%), Azerbaijan (22.9%), Armenia (22.7%) and Kyrgyzstan (21.9%).

Meanwhile, six of the thirteen Pacific Islands included in the report (Cook Islands, Fiji, Marshall Islands, Niue, Samoa, and Solomon Islands) recorded a tax-to-GDP ratio above the regional average, while the other seven were below average (Kiribati, Nauru, Papua New Guinea, Timor-Leste, Tokelau, Tonga, and Vanuatu). Finally, both Australia (29.9%, 2023 figure) and New Zealand (32.9%) had tax-to-GDP ratios above the Asia-Pacific average.

The tax-to-GDP ratio is widely used to assess a country’s domestic revenue mobilisation performance. However, the OECD considers that the tax-to-GDP ratio must be complemented by tax revenue per capita, showing the average amount of tax revenue collected per person (adult or child).

In the OECD report, countries with similar tax-to-GDP ratios can generate different levels of tax revenue per capita, therefore having different capacities to finance public services and infrastructure. For cross-country comparisons, tax revenue per capita is presented in purchasing power parity (PPP) terms to account for differences in price levels between countries and better reflect the effective purchasing power of governments.

The OECD stated in its analysis that tax revenue per capita depends on the tax-to-GDP ratio and GDP per capita, ‘Thus the same level of tax revenue per capita can result from different combinations of the tax-to-GDP ratio and the level of income per capita.’

This condition applies to Indonesia. Although it has a low tax revenue-to-GDP ratio in Asia-Pacific (11.8%), when measured by tax revenue per capita, its performance is similar to countries with a tax-to-GDP ratio above 20%. ‘Indonesia and Samoa had similar levels of tax revenue per capita in 2024, at USD 1,969 and USD 2,043 respectively,’ the OECD report stated. Samoa itself had a tax revenue-to-GDP ratio of 22% in 2024.