Jakarta. Repeated tax amnesty programs risk discouraging compliance and weakening Indonesia’s long-term revenue base, an economist warned on Wednesday, urging the government not to pursue a policy that has already proven counterproductive in other countries.

Achmad Nur Hidayat from UPN Veteran University said proposals for a new tax amnesty, currently under discussion in parliament, would only make taxpayers less motivated to pay. Indonesia has implemented similar schemes twice in the past decade under former president Joko Widodo.

“They don’t declare their real assets because they expect to wait until the next tax amnesty,” Achmad said during a talk show on Beritasatu TV. “This creates incentives for dishonesty and for delaying payments.”

According to Achmad, repeated amnesty creates moral hazard, where individuals or businesses hold off on paying taxes in anticipation of future leniency. Research from the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD), he noted, also shows repeated amnesty programs erode “tax morale,” or citizens’ willingness to comply.

“People think: let’s pay later, or let’s hide it and disclose it only when another amnesty comes,” he explained.

Achmad stressed that while tax amnesty may bring short-term revenue, the long-term effect is declining compliance and weaker state finances. He argued the policy is especially ill-timed, as Indonesia’s tax revenue collection by August 2025 had only reached 51.8 percent of the full-year target.

Instead, he voiced support for Finance Minister Purbaya Yudhi Sadewa, who has rejected calls for amnesty and vowed to pursue 200 companies and individuals accused of evading an estimated Rp 60 trillion ($3.6 billion) in taxes.

Push for Tax Reform
Achmad said reforms should focus on fairness and efficiency rather than short-term amnesty. He highlighted the regressive nature of Indonesia’s Value-Added Tax (VAT), where lower- and middle-income groups bear a disproportionate burden because much of their income goes toward taxable consumption.

“VAT actually weighs heavier on the middle and lower classes than on the wealthy. That sense of justice needs to be prioritized,” Achmad said.

He proposed a fairer system where higher-income groups contribute a larger share, while tax breaks or relief are extended to lower-income households.

Additional reforms, he argued, should include expanding the taxpayer base, simplifying rules for businesses and exporters, and targeting booming sectors that are enjoying extraordinary profits.