Indonesia's Tax Revenue Shortfall Raises Concerns About 2025 Budget Deficit

Tax Collection Falls Behind Target

Indonesia's tax revenue collection for 2025 has fallen significantly short of expectations. By November 2025, the government had collected Rp 1,633.82 trillion in tax revenue, representing 74.62% of the annual target set at Rp 2,189.3 trillion ¹

. This performance indicates a 1.9% growth in gross tax revenue compared to the previous period, but after adjustments for refunds and other components, the net revenue actually contracted by 3.25% ¹

Source 1

https://nasional.kontan.co.id/news/jauh-dari-target-penerimaan-pajak-baru-terkumpul-rp-1633-triliun-per-november-2025

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Concerns About Budget Deficit Widening

The shortfall in tax revenue has raised concerns about the potential widening of the 2025 budget deficit. The initial outlook for tax revenue in 2025 was Rp 2,076.9 trillion, which was already lower than the original target ²

. With the current collection rate, the Ministry of Finance has acknowledged that the shortfall is likely to widen. However, the government is making efforts to improve tax collection in the remaining month of the year to mitigate the impact on the budget deficit ²

Source 2

https://nasional.kontan.co.id/news/penerimaan-loyo-defisit-rawan-melebar-apbn-2025-di-tepi-jurang

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Government's Efforts to Address the Shortfall

Finance Minister Purbaya Yudhi Sadewa has stated that while the shortfall is expected to widen, the government is working to prevent it from becoming more severe ²

. The Ministry of Finance is focusing on enhancing tax compliance and exploring other revenue streams to minimize the gap between the actual and targeted tax revenue.

Implications for Indonesia's Economy

The tax revenue shortfall and the potential widening of the budget deficit could have significant implications for Indonesia's economy. A larger deficit could lead to increased borrowing, potentially affecting the country's credit rating and economic stability. The government will need to carefully manage its finances to balance the need for fiscal stimulus with the imperative of maintaining fiscal discipline.