Indonesia's Tax Revenue for 2025 Falls Short of Target

Overview of 2025 Tax Performance

Indonesia's tax revenue for the year 2025 reached Rp 1,917.6 trillion, representing 87.6% of the annual target of Rp 2,189.3 trillion ¹

. This performance indicates a shortfall of 12.4% from the budgeted amount. The Ministry of Finance reported that the tax revenue decreased by 0.7% year-on-year ³

Source 3

https://nasional.kontan.co.id/news/setoran-pajak-hanya-19176-triliun-di-sepanjang-2025-masih-turun-07

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Factors Contributing to the Shortfall

Several factors contributed to the tax revenue shortfall in 2025:

1. Moderation in commodity prices affecting related tax revenues ³
   Source 3

   https://nasional.kontan.co.id/news/setoran-pajak-hanya-19176-triliun-di-sepanjang-2025-masih-turun-07
2. Significant increase in tax restitution to Rp 361.2 trillion, a 35.94% YoY increase ⁶
   Source 6

   https://nasional.kontan.co.id/news/restitusi-pajak-sepanjang-2025-tembus-rp-3612-triliun-melonjak-36
3. Fiscal policies aimed at maintaining consumer purchasing power ³
   Source 3

   https://nasional.kontan.co.id/news/setoran-pajak-hanya-19176-triliun-di-sepanjang-2025-masih-turun-07

2026 Tax Targets and Outlook

Despite the shortfall in 2025, the government has set an ambitious tax revenue target of Rp 2,693 trillion for 2026 ²

. This represents a 40.4% increase from the 2025 realization. The 2026 target includes:

• Domestic tax revenue: Rp 2,601 trillion
• Income tax: Rp 1,209 trillion
• VAT and luxury goods sales tax: Rp 995.27 trillion

Challenges and Regional Performance

The tax collection performance varied across different regions in Indonesia. Only 33.2% of tax offices (117 out of 352) achieved 100% of their tax targets ⁴

. The Ministry of Finance will need to address these regional disparities while striving to meet the higher 2026 target.

Implementation Challenges for 2026

The delayed issuance of derivative regulations for the 2026 state budget poses a risk to the effectiveness of state spending at the beginning of the year ⁷

. The government must ensure timely implementation of budget execution mechanisms to support the ambitious revenue targets.