The government has set a tax revenue target of IDR 2,357.71 trillion in 2026, out of a total projected state revenue of IDR 3,147.68 trillion. This represents a 13.51% increase from the 2025 target of IDR 2,076.9 trillion.

The target assumes economic growth of 5.4% and inflation at 2.5% in 2026, while the Directorate General of Taxes (DJP) will contribute an extra effort of 5.61% to achieve the 13.51% rise in tax collection.

However, Finance Minister Sri Mulyani Indrawati stressed that the government will not raise tax rates to meet this goal. Instead, the increase will come from administrative reforms and stronger enforcement.

“The extra effort of around 5% will be delivered through various administrative reforms and enforcement measures,” Sri Mulyani said at the 2025 State Budget press conference, Tuesday (August 19, 2025).

General Policy Strategy

According to the 2026 State Budget and Financial Note, the government’s approach to the tax target consists of general policies and technical strategies.

General policies include:

1. Expanding the tax base through intensification and extensification to support fiscal strength, economic growth, and public protection.

2. Enhancing compliance with IT-based supervision, joint programs, and law enforcement to improve administration and tax organization.

3. Strengthening ongoing tax reforms and harmonizing international tax policies to raise tax revenue and ratio.

4. Providing well-targeted tax incentives to boost investment, industrial downstreaming, and high value-added activities.

Technical Strategies

The technical policies consist of:

1. Optimizing tax base expansion using data and risk-based methods, leveraging Coretax and Compliance Risk Management (CRM), while improving taxpayer compliance through joint audits, joint investigations, joint collections, and intelligence operations.

2. Offering well-targeted tax incentives to promote investment, household spending, green economy development, and infrastructure.

3. Drafting fair and legally certain tax regulations, including the enforcement of the Tax Harmonization Law, with regulations designed to provide a deterrent effect.

4. Tax debt collection to improve recovery efficiency.

Tax Reform & Tackling Shadow Economy

Beyond these strategies, the government will continue strengthening tax reforms initiated in 2025, especially targeting the shadow economy.

In 2025, Indonesia launched studies to measure and map the shadow economy, developed a special Compliance Improvement Program (CIP), and enhanced intelligence analysis to address high-risk taxpayers. Additional intelligence reviews will further explore hidden tax potential.

Concrete measures include:

• Integrating National ID (NIK) with Tax ID (NPWP) through the Core Tax Administration System (CTAS) effective January 1, 2025.

• Active canvassing to identify and register unlisted taxpayers.

• Appointing foreign entities as VAT collectors for digital trade (PMSE).

• Utilizing OSS BKPM business data to target MSMEs.

• Data matching across digital platforms to strengthen tax databases and boost compliance.

The government will also prioritize monitoring high-risk shadow economy sectors, including retail trade, food and beverages, gold trade, and fisheries.

Global Tax & International Cooperation

Starting January 1, 2026, Indonesia will implement a global minimum tax, alongside automatic exchange of financial information (AEOI) covering e-money, digital currencies, and crypto assets.

International cooperation will also be reinforced through the Assistance in Recovery of Tax Claims, enabling reciprocal cross-border tax collection.

Indonesia has already signed agreements with 81 countries and is negotiating further collaboration with Japan and South Korea to secure revenue and strengthen global tax compliance.

“Tax revenues in the 2026 State Budget are projected to reach IDR 2,357,714.3 billion, supported by national economic projections and technical tax policies, including CRM optimization in taxpayer compliance supervision,” the document states.