Indonesia’s Minister of Finance, Purbaya Yudhi Sadewa, has set an ambitious target to significantly increase the country’s tax ratio (tax revenue-to-GDP ratio) in 2026. From the current level of around 9%, the government aims to raise the ratio to between 11% and 12%.

The target is part of broader efforts to strengthen Indonesia’s fiscal position amid expectations of improving national economic conditions.

2025 Tax Revenue Fell Short of Target

In 2025, tax revenue failed to meet the state budget target. Total tax collection reached Rp 1,917.6 trillion, or 87.6% of the Rp 2,189.3 trillion target set in the 2025 State Budget (APBN).

The figure also declined by approximately 0.7% compared to 2024. As a result, Indonesia’s tax ratio dropped from 10.08% in 2024 to around 9% in 2025.

The economic slowdown throughout 2025 was identified as a major factor behind the weaker tax performance.

Improving Economy Must Be Followed by Higher Tax Collection

Minister Purbaya acknowledged that the economic slowdown could explain the shortfall in tax revenue last year. However, he emphasized that such justification will no longer be acceptable if the economy improves in 2026.

In other words, if economic growth accelerates, tax revenue must increase accordingly. Failure to improve tax collection amid stronger economic performance would be difficult to defend.

A Major Challenge for the Tax Authority

Raising the tax ratio to 11–12% is described as a major mission and significant challenge for the Directorate General of Taxes (DGT).

To achieve this goal, the government plans several internal improvements, including:

• Staff rotation and organizational restructuring
• Strengthening management systems
• Enhancing supervision down to the regional level

These measures are expected to optimize state revenue collection.

Indonesia’s Tax Ratio Trend

For context, Indonesia’s tax ratio fell to 8.42% in the first semester of 2025. During the COVID-19 pandemic in 2020–2021, the ratio also declined to between 8.33% and 9.11%.

However, it rebounded above 10% in 2022 and 2023, supported by tax reforms under the Harmonized Tax Law (UU HPP) and the global commodity boom, before declining again in 2025.

Strengthening Fiscal Stability

Minister Purbaya stressed that improving tax performance is crucial to maintaining fiscal sustainability and economic stability. He called on all Ministry of Finance officials to work more seriously and ensure there are no tax leakages.

According to him, achieving an 11–12% tax ratio would significantly strengthen the country’s fiscal condition.

Ultimately, the success of this target depends on the collective performance and commitment of all Ministry of Finance personnel.