Jakarta. The Finance Ministry has uncovered tax evasion involving at least 40 steel companies that failed to pay value-added tax (VAT), prompting plans to inspect major players and review internal controls at the tax office.

Finance Minister Purbaya Yudhi Sadewa said on Wednesday that authorities had identified 40 steel firms engaged in VAT evasion, with two large companies set for on-site inspections in the near term.

The companies include firms from China, Indonesia, and several other countries, he said. Preliminary findings suggest the scheme may have involved internal actors, prompting the ministry to launch a deeper investigation.

“It’s puzzling. Large companies should be easy to monitor. That suggests there may be people on the inside involved. We will look into it,” Purbaya said.

The ministry has previously flagged similar practices involving Chinese steel companies operating in Indonesia. In those cases, business owners allegedly set up local entities and used Indonesian identities, allowing transactions to avoid VAT obligations.

According to ministry estimates, if transactions from a single such company were fully captured, the state could collect up to Rp 4 trillion ($260 million) a year. Officials said tackling the broader evasion could significantly boost government revenue.

The findings come as the government sets an ambitious tax revenue target for 2026 of Rp 2,357.7 trillion, up nearly 23% from the 2025 realization of Rp 1,917.6 trillion.

Purbaya said the ministry is balancing stricter enforcement with efforts to clean up internal governance following recent corruption cases within the Directorate General of Taxes. He has vowed to take firm action against rogue tax officials, including removing those found to be involved in misconduct.

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