Indonesia's Tax Revenue Faces Challenges in 2025

Current Tax Revenue Status

As of October 2025, Indonesia's tax revenue has reached Rp 1.459 trillion, representing 70.2% of the targeted Rp 2.076.9 trillion ²

. This performance indicates a 3.8% decline compared to the same period last year when revenue was Rp 1.517.5 trillion ²

Source 2

https://finance.detik.com/berita-ekonomi-bisnis/d-8261469/purbaya-akui-setoran-pajak-tak-capai-target-janji-jaga-defisit-di-bawah-3

. The shortfall in tax revenue has raised concerns about the country's fiscal health and budget management.

Economic Factors Contributing to Shortfall

Chief Economist of PT Bank Central Asia Tbk, David Sumual, highlighted that the target set for 2025 is considered quite high given the current economic conditions ¹

. The decline in commodity prices has significantly impacted tax revenue, particularly from sectors related to natural resources and exports. Additionally, overall economic growth has been weaker than expected, further affecting tax collection.

Government Response and Measures

Finance Minister Purbaya Yudhi Sadewa acknowledged the likelihood of a tax revenue shortfall but assured that the government is working to mitigate the impact ²

. Purbaya mentioned that while there might be a shortfall, the government is making efforts to ensure that the budget deficit remains under 3% of GDP. The government is exploring various measures to enhance tax collection in the remaining months of 2025.

Concerns About 'Ijon Pajak' Practices

There are emerging concerns about the potential use of 'ijon pajak' or preemptive tax collection practices, where taxpayers are asked to pay their tax obligations for the following year in advance ¹

. David Sumual noted that such practices, while potentially helping to meet short-term targets, could have negative implications for businesses and the overall economy.

Implications and Future Outlook

The tax revenue shortfall in 2025 poses significant challenges for Indonesia's fiscal management. The government's ability to manage the deficit and implement effective tax policies will be crucial in navigating these challenges. For 2026, Finance Minister Purbaya has indicated a more hands-on approach to assessing and improving tax collection mechanisms.