Jakarta. Finance Minister Purbaya Yudhi Sadewa carried out a surprise inspection of a Chinese-owned steel company in Jakarta on Thursday as the government steps up efforts to improve tax compliance and ensure fair competition in the country's steel industry.

Purbaya visited the company's facility in the Pulogadung industrial estate after authorities identified preliminary indications that the scale of its business activities may not fully align with its reported tax obligations.

The government stressed that the move was intended to improve compliance rather than discourage investment.

"We want to ensure that all companies operating in Indonesia conduct their business activities in accordance with applicable regulations," Purbaya said during the visit. "Our objective is not to hamper or shut down businesses, but to ensure healthy and fair competition for all industry players."

Officials said government data raised concerns that the taxes paid by the company may not accurately reflect the scale of its operations. Authorities have requested documents and supporting records to verify the findings.

Purbaya emphasized that the review remains at the clarification stage and that authorities have not concluded whether any violations occurred.

"We have asked the company to provide relevant documents so that the process can be conducted transparently and based on facts," he said.

The company told officials that its operations comply with Indonesian regulations and pledged to cooperate with the ongoing review.

The inspection comes as Indonesia seeks to improve tax collection and strengthen oversight of major industries. Indonesia has one of the lowest tax-to-GDP ratios among major economies in Southeast Asia. The government is targeting a tax ratio of 10.48% in 2026, while neighboring economies generally collect substantially more tax revenue relative to the size of their economies.

The government has set a tax revenue target of between Rp 2,357.7 trillion ($132 billion) and Rp 2,693.7 trillion for 2026 as it seeks to strengthen fiscal capacity while financing President Prabowo Subianto's policy agenda.

The steel industry has become increasingly important to Indonesia's industrial ambitions. National steel consumption is projected to reach 19.3 million metric tons in 2025, up 3.8% from the previous year, driven primarily by demand from the construction sector. Despite growing domestic demand, around 55% of Indonesia's steel supply still relies on imports.

The Finance Ministry said similar inspections may be carried out at other companies based on government monitoring and data analysis.

Officials described the initiative as part of efforts to establish a level playing field across industries by ensuring that all businesses meet their tax obligations and comply with regulations.

"The government wants to ensure that every company has an equal opportunity to grow," Purbaya said. "Therefore, all businesses must fulfill their obligations fairly and in accordance with the rules so that national industries can develop in a healthy and sustainable manner."

The ministry did not identify the company involved in Thursday's inspection or disclose the potential value of any tax discrepancies under review.

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