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 ambitious big four challenger firm has also appointed ex-RSM partner Brad Ashton to build out its customs and global trade practice
The big four firm allegedly reviewed backdated documents and signed off on accounts that removed hundreds of millions of dollars of Abramovich’s assets
New Tier 1 entrants and an expanding cohort of established players indicate that law firms are becoming increasingly credible challengers in Europe's TP market
Awards
Leading firms and individuals gathered in Dubai to celebrate standout legal, dealmaking and tax work across the region
Tax authorities want more revenue, have better tools to find it and are increasingly willing to fight for it
Audifina, the sixth-largest firm of its kind in Lithuania, will bring a 90-strong team with offices in Vilnius and Kaunas to RSM’s international platform
As global capability centres use AI to deliver services, MNEs face a fresh wave of PE and TP exposure that their existing playbooks weren't built for
The deal for Comtax hands Ryan immediate scale in Brazil, with a near-70-strong team serving clients from São Paulo
The arrivals of Julio Castro and Adam Blakemore mean the firm has added six tax partners to its global practice since the start of 2025
Tax authorities have gained unprecedented transparency through CbCR, but a new study suggests they may not be looking in the right places
Gift this article