Indonesian Finance Minister Launches Unconventional Tax Compliance Drive

'Love Letters' for Taxpayers

In a novel approach to improve tax compliance, Indonesia's Finance Minister Purbaya Yudhi Sadewa revealed that his ministry has been sending 'love letters' or formal tax inquiry letters (SP2DK) to businesses that have failed to pay their taxes on time. This measure is part of a broader effort to meet tax revenue targets by the end of 2025. The letters are intended to encourage prompt payment from delinquent taxpayers and serve as a gentle reminder of their tax obligations.

Multi-Pronged Approach to Tax Compliance

In addition to the letter campaign, the ministry is taking a more personalized approach by conducting direct visits to non-compliant taxpayers. This comprehensive strategy demonstrates the government's commitment to maximizing tax revenue through both persuasive measures and direct engagement. The Finance Minister emphasized that all efforts are being directed towards ensuring that taxpayers comply with existing regulations.

Implications for Tax Revenue

The initiative reflects the government's seriousness in addressing tax compliance issues and improving revenue collection. By employing both soft diplomacy through 'love letters' and more assertive measures like direct visits, the ministry aims to significantly boost tax receipts. This approach is particularly crucial as the government strives to meet its ambitious tax revenue targets for 2025.