Indonesia targets record tax revenue share without raising rates in 2027 budget

Indonesia's latest budget proposal seeks to achieve the highest tax-to-GDP ratio in a decade, targeting 9.26% for 2027 compared with the projected 8.96% for this year. Bimo Wijayanto, the tax director general, explained that the government will rely on a more comprehensive tax registry to broaden the base, rather than raising existing rates or adding new taxes. The plan sets 2027 tax revenue at Rp 2.6 quadrillion, representing a 12.2% year-on-year increase from one outlet Rp 2.31 quadrillion forecast.

So far, no rate hikes or new tax introductions are planned for the upcoming fiscal year. While the narrow tax revenue figure is clear, the Finance Ministry has yet to publish the target for the broader tax-to-GDP ratio that includes customs and excise. One outlet first-half ratio stands at 9.32%, still below President Prabowo Subianto's election promise of 13-14%.