JAKARTA. Directorate General of Taxes (DGT) has warned of potential tax revenue losses arising from the implementation of the government's Free Nutritious Meals (MBG) Program. The concern stems from differing interpretations regarding the tax status of operational funds received by the Nutrition Fulfillment Service Units (SPPG), which are responsible for implementing the program.
Director General of Taxes Bimo Wijayanto, as quoted by Kontan.co.id, said the issue represents one of the challenges the government faces in overseeing national priority programs. According to him, there is a risk of potential loss in state revenue that must be addressed to ensure strategic government programs continue without compromising compliance with Indonesia's tax regulations.
"When we talk about the challenges and dynamics of overseeing government programs, there is certainly a risk of potential loss related to the implementation of several priority programs, including those managed by the National Nutrition Agency (BGN)," Bimo said during the Ministry of Finance Corporate University Open Class (KCOC) seminar on Thursday (June 18, 2026).
One issue highlighted by the DGT concerns a circular letter issued by the former Head of the National Nutrition Agency. The circular stated that all grant funds under the Free Nutritious Meals Program are exempt from tax.
According to Bimo, whether a particular type of income or transaction is taxable or non-taxable cannot be determined through an agency's circular letter. Instead, the tax treatment of any transaction must be based on the provisions stipulated in Indonesia's tax laws and regulations.
"There was a circular letter issued by the former Head of BGN stating that all MBG grants are non-taxable. However, the determination of whether something is taxable or non-taxable should be based on the law," he explained.
SPPG Operational Funds Still Considered Subject to Income Tax
Bimo explained that BGN had previously proposed that the daily operational incentive funds distributed to SPPG kitchen operators be classified as assistance or grants, making them exempt from taxation.
However, under the current tax regulations, the DGT maintains that these funds remain subject to Income Tax (PPh). The reason is that the funds are received by business entities that conduct operational activities and generate profits from their business operations.
Therefore, the operational funds received by SPPG operators continue to meet the criteria for taxable income under the prevailing tax laws.
"Based on the current legal provisions and the existing regulatory framework, these funds remain subject to income tax because they are received by business entities that generate profits from their operations," Bimo said.
DGT and BGN Seeking a Joint Solution
Despite the differing views on the tax treatment of SPPG operational funds, Bimo confirmed that the DGT and BGN are currently coordinating to find a mutually acceptable solution.
The discussions aim to ensure that the Free Nutritious Meals Program can continue to operate effectively without creating legal uncertainty or jeopardizing state tax revenues.
According to Bimo, the government is working to strike a balance between supporting the successful implementation of national priority programs and maintaining legal certainty in Indonesia's tax system.
"We understand the issue, and we are working together to resolve it," Bimo concluded.
