Jakarta. Indonesia’s ambitious plan to raise Rp 2,357.7 trillion ($145.6 billion) in tax revenue by 2026 will likely force the government into a tougher stance on tax collection, analysts warn, as structural weaknesses and low compliance continue to weigh on the system.

The target represents a 13.5 percent jump from this year’s tax intake, aligned with a 7.3 percent increase in state spending to Rp 3,768.5 trillion ($232.8 billion). The government also expects the budget deficit to shrink to 2.48 percent of GDP.

“The figures suggest the government will intensify its tax collection drive next year. In the past five years, taxes have risen from 77 percent to 86 percent of state revenue,” said Deni Friawan, senior researcher at the Centre for Strategic and International Studies (CSIS), during a briefing in Jakarta on Monday.

Yet, Indonesia’s tax base remains shallow. Of the country’s 145 million working-age population, only around 17 million consistently file or pay taxes. Untapped potential in the informal sector and the underground economy leaves a wide gap in collections, while heavy dependence on global commodity prices exposes state finances to external shocks.

Finance Minister Sri Mulyani Indrawati has pushed back against concerns that the government may resort to drastic measures. She stressed that reforms, tighter compliance oversight, and digital tools would be the backbone of efforts to lift revenue.

Planned steps include strengthening the “core tax” administration system, expanding data sharing between government agencies, taxing digital transactions, and rolling out joint initiatives in auditing and enforcement.

“Data integration and the new core tax system will be pushed harder. We still have room to raise revenue without inventing new taxes,” Sri Mulyani said.

Still, analysts warn that without broadening the tax base and improving compliance, the government’s ambitious revenue targets risk placing greater pressure on taxpayers already in the system.

Add as a preferred source on Google +