Jakarta. Finance Minister Purbaya Yudhi Sadewa said the government will not raise tax rates despite projecting this year's tax revenue to fall short of the state budget target, opting instead to strengthen collections by broadening the tax base through better use of data and technology.

Purbaya previously projected tax revenue would reach Rp 2,310.8 trillion this year, or about 98.8% of the Rp 2,357.7 trillion target in the 2026 state budget, implying a shortfall of around Rp 46.9 trillion. While the gap is significantly smaller than the roughly Rp 271 trillion shortfall recorded in 2025, the government said it would rely on stronger tax administration rather than higher tax rates to improve revenue collection.

"Regarding the government's medium-term strategy to strengthen the state revenue base, we can say that our tax strategy is directed toward broadening the tax base rather than simply raising tax rates," Purbaya said at the House of Representatives' plenary session on Tuesday.

He said the government would leverage technology and integrated data systems to better capture revenue from the digital economy, the shadow economy —including online businesses and other economic activities that are not fully reported for tax purposes, such as freelancers and street food vendors— and the informal sector, which remain under-taxed

The approach is also expected to help tax authorities identify potential tax underpayments through better data matching and compliance monitoring, part of broader efforts to narrow Indonesia's tax compliance gap. Citing a World Bank assessment, Tax Director General Bimo Wijayanto earlier said the country's combined value-added tax and corporate income tax compliance gap averaged about Rp 548 trillion, or 3.7% of gross domestic product, between 2016 and 2021.

Beyond taxation, Purbaya said the government would also strengthen customs and excise revenue through digitalized services, tighter supervision, stronger audits and enforcement, as well as efforts to combat illegal imports and illicit excisable goods.

Despite stricter enforcement, he said the government would continue to protect the investment climate, support exports, and ensure smooth business operations.

As of the first half of 2026, Indonesia's tax revenue reached Rp 1,035.7 trillion, equivalent to 43.9% of the target set in the 2026 state budget, up 24.6% from the same period last year.

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