Jakarta. Indonesia’s tax revenue fell 3.9 percent year on year to Rp 1,459.03 trillion ($87.4 billion) as of October 31, 2025, down from Rp 1,517.54 trillion in the same period last year, according to data from the Ministry of Finance.

Director General of Taxes Bimo Wijayanto said on Monday that the contraction was mainly driven by a sharp rise in tax refunds, which reduced net receipts even though gross collections turned positive.

“Our net revenue has been corrected by the impact of restitutions. As of October 2025, restitutions jumped 36.4 percent, so although gross tax revenue is improving, net receipts are still declining,” Bimo told lawmakers during a hearing with Commission XI of the House of Representatives in Jakarta.

Refunds reached Rp 340.5 trillion, up 36.4 percent from Rp 249.59 trillion a year earlier.

The steepest rise occurred in corporate income tax refunds, which totaled Rp 93.8 trillion in October 2025, increasing 80 percent from Rp 52.13 trillion in October 2024.

However, Bimo noted that the surge in refunds also carries economic benefits.

“This means money is flowing back to the public, including the private sector, and can help stimulate economic activity,” he said.

Value-added tax (VAT) refunds reached Rp 238.86 trillion, an increase of 23.9 percent year on year from Rp 192.72 trillion.

Under Indonesian tax regulations, any excess payment remaining after offsetting tax liabilities must be returned to taxpayers within a maximum of one month.

Indonesia has set a 2025 tax revenue target of Rp 2,076.9 trillion ($124.4 billion). As of the end of October, collections had reached Rp 1,459 trillion, equivalent to around 70 percent of the target. The pace is slower compared with the same period in 2024.