Indonesia: Indonesia to optimise tax revenue and separate tax authority from the Ministry of Finance

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement


Indonesia: Indonesia to optimise tax revenue and separate tax authority from the Ministry of Finance

karyadi.jpg
Tanuwijaya-Chaterine

Freddy Karyadi

Chaterine Tanuwijaya

The Indonesian Ministry of Finance has revealed that Indonesia's net tax revenue for 2015 was only IDR1,055 trillion, about 81.5% of the target set out in the 2015 Budget. Although the figure is an all-time high, it still represents a shortfall compared with budgetary projections.

In the release announcing the news, the Ministry of Finance states that economic growth was estimated to be about 4.73% with inflation around 3.1%. The realised average currency exchange rate towards USD is Rp.13,392/USD, weaker than in 2014 (when the exchange rate was Rp.12,500/USD). Realised state income is Rp.1,491.5 trillion (a total from tax income, customs and duty and non-tax state income). The net tax income in 2015, after calculating the tax restitution to taxpayers is Rp.1,055 trillion; about 81.5% from the target in the 2015 budget.

In response to the weakening percentage of realised state income, the Minister of Coordinating of Politics, Law and Security, who is also the Chairman for the Committee for the Prevention and Eradication of Money Laundering, mentions that the Anti-Corruption Commission (KPK) should chase money laundering cases and cooperate with the Directorate General of Tax for strict supervision for taxpayers to avoid tax evasion. He added that tax evasion may be handled by the Anti-Corruption Commission, the police or a prosecutor.

In 2016, the Indonesian government plans to separate the tax authority from the Ministry of Finance and to issue a revised General Provision of Tax Law that is planned to be discussed this year. If the revised law is passed in 2016, the new autonomous tax authority is planned to start work effective 2017-2018. This separation is expected to increase state income by virtue of the 'new' authority being more flexible in doing its job, as well as quicker actions and approvals being easier to complete, such as administrative tasks, operational budget issues or dismissal procedures of officials.

Freddy Karyadi (fkaryadi@abnrlaw.com) and Chaterine Tanuwijaya (ctanuwijaya@abnrlaw.com), Jakarta

Ali Budiardjo, Nugroho, Reksodiputro, Counsellors at Law

Website: www.abnrlaw.com

more across site & shared bottom lb ros

More from across our site

The arrival of Alex Anderson swiftly follows that of funds tax specialist Stuart Alter and suggests the Tier 3-ranked firm has higher ambitions
One of the two appointments is EY’s Gordon McIntosh, who becomes the big four firm’s second senior tax departure in September
Balson's move from a Tier 1 practice to a Tier 3 competitor looks counterintuitive. The market data suggests it is anything but
Awards
It was another banner year for Deloitte, which picked up more awards than any other firm at a gala ceremony held at The Londoner in Leicester Square
The big four firm has been embroiled in a scandal over partners’ misuse of confidential board papers to pitch for and win corporate audits for Westpac and Dexus
Drawing on lessons from the PepsiCo case, tax lawyer Paul McNab explains why the ATO's latest royalty guidance should concern multinationals well beyond the technology sector
As pillar two exposes the limits of fragmented tax processes, organisations are rethinking their operating models to create the trusted data foundations that AI demands
World Tax data shows Matt Donnelly is moving from a Tier 3 transactional tax practice to a Tier 1 market leader, underlining Kirkland & Ellis’s pull at the top end of the market
Nexdigm's Maulik Doshi and infer360 co-founder Sunil Agarwal dig deeper into their partnership and discuss why the tax technology industry is consolidating
Advisers won’t be short of work in a world of increased valuation disputes, documentation requirements and behavioural responses from clients seeking to protect their wealth
Gift this article