Tax Revenue Jumps 22.1% Amid Widening Deficit

The government has recorded strong tax revenue performance despite a widening deficit in the State Budget (APBN). As of the end of May 2026, tax revenue reached Rp834.4 trillion, representing a 22.1% year-on-year growth, serving as the main pillar of realised state revenue which totalled Rp1,185 trillion, or 37.6% of the 2026 APBN target. This performance occurred as the budget deficit widened to Rp180.4 trillion, equivalent to 0.70% of Gross Domestic Product (GDP).

The APBN deficit at the end of May 2026 increased compared to the position at the end of April, which stood at Rp164.4 trillion or 0.64% of GDP. Consequently, there was a monthly deficit increase of approximately Rp16 trillion, causing the deficit space to widen after having narrowed in April.

Nevertheless, the government assesses that the fiscal condition remains stable alongside strong growth in state revenue. Minister of Finance Purbaya Yudey Sadewa revealed that as of 31 May 2026, state revenue reached Rp1,185 trillion, or 37.6% of the Rp3,153.6 trillion APBN target. This realisation grew by 19.1% compared to the same period last year.

“This is the APBN realisation up to May 2026, which continues to show a positive trend. We see revenue growing by 19.1%. The most interesting part is that tax revenue rose by 22.1%. There is an improvement here, particularly from tax receipts,” said Purbaya during the APBN KiTa press conference for the May 2026 edition in Jakarta on Wednesday.

According to Purbaya, the growth in state revenue was primarily supported by tax receipts, which reached Rp958.2 trillion or 35.6% of the APBN target. Of this amount, tax revenue reached Rp834.4 trillion, while customs and excise revenue was recorded at Rp123.8 trillion.

He added that this year’s tax revenue performance shows a significant improvement compared to last year. After recording negative growth throughout 2025, tax revenue has returned to positive growth and has the potential to increase further alongside improvements in tax administration and compliance.

“Last year, the full-year tax growth was negative. Now it is positive, and it might reach 20.5% later. We will continue to push it upwards alongside improvements in taxation,” he said.

On the other hand, state expenditure realisation up to the end of May 2026 reached Rp1,365.4 trillion, or 35.5% of the APBN ceiling of Rp3,842.7 trillion. This figure grew by 34.4% year-on-year, which is higher than the growth in state revenue. Of the total expenditure, central government spending reached Rp1,059.3 trillion, while transfers to regions realised Rp306.1 trillion.

Although the APBN remains in a deficit position, the government considers the fiscal fundamentals to remain healthy. This is reflected in a primary balance surplus of Rp58.6 trillion. The primary balance surplus indicates that state revenue is still capable of covering state expenditure excluding interest payments, making it a vital indicator for fiscal sustainability.

“Because there is a significant improvement in APBN taxes. What is most important to look at here is the primary balance surplus of Rp58.6 trillion,” concluded Purbaya.