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 network’s tax service line grew more than those for audit and assurance, advisory and legal services over the same period
The deal is a ‘real win’ for US-based multinationals and its announcement is a welcome relief, experts have told ITR
Tom Goldstein, who is now a blogger, is being represented by US law firm Munger, Tolles & Olson
In looking at the impact of taxation, money won't always be all there is to it
Australia’s Tax Practitioners Board is set to kick off 2026 with a new secretary to head the administrative side of its regulatory activities.
Ireland’s Department of Finance reported increased income tax, VAT and corporation tax receipts from 2024; in other news, it’s understood that HSBC has agreed to pay the French treasury to settle a tax investigation
The Australian Taxation Office believes the Swedish furniture company has used TP to evade paying tax it owes
Supermarket chain Morrisons is facing a £17 million ($23 million) tax bill; in other news, Donald Trump has cut proposed tariffs
The controversial deal will allow US-parented groups to be carved out from key aspects of pillar two
Awards
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2027 World Tax rankings and the 2026 ITR Tax Awards globally
Gift this article