Tax Office Flags Potential Revenue Leakage from Free Meals and Village Cooperative Programmes
The Directorate General of Taxes (DJP) at the Ministry of Finance has identified a risk of potential state revenue loss stemming from the implementation of several government priority programmes. This risk arises from policy confusion at the executing level and the suboptimal management of funds and tax compliance in the field.
Director General of Taxes Bimo Wijayanto revealed that the government is currently scrutinising several areas deemed to have the potential to reduce state revenue from the taxation sector. Two programmes under particular attention are the Free Nutritious Meals (MBG) programme managed by the National Nutrition Agency (BGN) and the development of the Red and White Village Cooperatives.
According to Bimo, potential tax revenue leakage can occur if policy implementation in the field is not aligned with applicable tax provisions. Therefore, any determination regarding tax objects or tax facilities must refer to prevailing laws and regulations.
One source of potential revenue loss highlighted by the DJP originates from a policy previously applied in the MBG programme. Bimo explained that a circular issued by the former head of BGN stipulated that all grants within the MBG programme were not subject to tax. He argued that this policy could create confusion, as the determination of whether a transaction is a tax object or not should be established based on statutory provisions.
‘There is some policy confusion, I would say. There was a circular from the former head of BGN which stipulated that all MBG grants are not subject to tax. In fact, determining whether an item is taxable or not should be based on the law,’ Bimo stated in an online broadcast quoted on Saturday, 20 June 2026.
According to the DJP, if there are differing interpretations regarding the tax status of funds or assistance, the risk of reduced state revenue can arise because transactions that should be taxable are not subjected to tax obligations.
The DJP is also scrutinising the classification of daily operational incentive funds for nutrition service unit kitchens, which in practice are referred to as grants or aid.