Purbaya Plans to Impose VAT on Toll Roads, Targeting Implementation in 2028

The government, through the Directorate General of Taxation (DJP), is preparing a plan to impose Value Added Tax (VAT) on toll road services. This policy forms part of the strategy to expand the tax revenue base in the coming years. The plan is outlined in the DJP’s Strategic Plan (Renstra) for 2025–2029, which includes various agendas for drafting new regulations to strengthen state revenues. In the document, the DJP includes the preparation of rules on the mechanism for collecting VAT on toll road services as one of the priority policies. Referring to the DJP’s Renstra 2025–2029 document published on its official website, the mechanism for implementing VAT on toll roads is targeted to be completed in 2028. The toll road VAT policy will be enshrined in a Draft Ministerial Regulation on Finance (RPMK). However, to date, there are no technical details regarding the scheme for implementing the toll road tax via VAT, either in terms of rates or collection mechanisms. This means the plan to impose VAT on toll roads is still at the policy formulation stage, and its implementation will depend on the derivative regulations being prepared by the government. Overall, the DJP views the expansion of the tax base as an important step to increase the tax revenue ratio, which remains relatively low compared to development financing needs. In the Renstra, the government also emphasises the importance of optimising state revenues through tax extensification and intensification strategies, including opening up new tax sources. This step is part of the government’s strategy to broaden tax revenue sources more fairly, while also adapting the tax system to economic developments. The DJP assesses that new regulations are needed as a legal basis for taxing sectors that have not been optimally addressed so far. In addition to the toll road tax through VAT collection, the tax base expansion agenda also covers levies on cross-border digital transactions and the implementation of carbon taxes.