DGT Pushes Cash Transaction Restrictions Amid Tax Avoidance Concerns
The Directorate General of Taxes is once again encouraging regulations to limit cash or physical currency transactions. This push has strengthened after the tax authority uncovered tax avoidance practices involving cash-based transactions in the steel industry.
Director General of Taxes Bimo Wijayanto said that the discourse on limiting physical currency has long been discussed by the government. However, the policy does not fall directly under the DGT’s authority.
According to him, investigation results that found patterns of tax avoidance based on cash transactions could serve as empirical evidence to strengthen the proposal for such limitations.
“Restrictions on physical currency have been planned for several years. It is not within our domain. But if there is strong empirical evidence, we will see later,” said Bimo during an inspection in Tangerang on Thursday (5/2/2026).
The DGT also considers that the shift toward digital payment systems should make large-value cash transactions increasingly limited. The use of payment gateways and QRIS is seen as easier to trace and monitor.
Findings in the Steel Industry
Quoting bisnis.com, the DGT found practices involving the sale and purchase of construction materials conducted without tax invoices and without VAT collection. Many transactions were carried out in cash to make them difficult to trace.
Bimo explained that this pattern makes it easier for business actors to conceal revenue. In investigations involving 40 steel companies, the DGT found diversion of income into personal accounts of management, shareholders, and even employees. Some transactions were conducted entirely in cash.
As a result, VAT was not collected, and corporate income tax was reported lower than it should have been. The DGT estimates that the potential state losses from these 40 companies reached around IDR 4 trillion per year.
In addition to the steel industry, the DGT also sees indications of similar practices in other sectors, including the furniture industry. The tax authority is still examining these findings.
In the ongoing investigation, the preliminary losses from three main entities, PT PSI, PT PSM, and PT VPN, are estimated to reach IDR 510 billion. The DGT is working with the Financial Transaction Reports and Analysis Center (PPATK) to trace fund flows through various accounts.
Bimo emphasized that tax law enforcement is not solely aimed at pursuing state revenue, but also at creating fair business competition. Minister of Finance Purbaya Yudhi Sadewa stated that inspections targeting tax evaders will be intensified. (ASP/KEN)
