Will the Tax Ratio Drop Again in 2025? Here's What the DGT Says

JAKARTA. The government projects that Indonesia’s tax ratio will slightly weaken in 2025, even though nominal tax revenue is expected to continue rising. This reflects the challenge of maintaining a balance between improving economic growth and efforts to strengthen state revenue.

Data from the Ministry of Finance shows that Indonesia’s tax ratio has declined over the past three years, from 10.38% in 2022, down to 10.31% in 2023, and further to 10.08% in 2024. For 2025, the outlook is projected at just 10.03%.

This downward trend has raised concerns, as it could affect Indonesia’s fiscal resilience in the medium to long term.

Director of Extensions, Services, and Public Relations at the Directorate General of Taxes (DGT), Rosmauli, emphasized that a lower tax ratio does not necessarily indicate weakening revenue. On the contrary, it reflects complex dynamics, positive economic growth alongside continued increases in tax revenue.

She added that the government remains focused on maintaining fiscal consolidation while safeguarding public purchasing power and supporting national economic recovery. The goal is to gradually and sustainably increase the tax ratio.

“We are optimistic that with consistent reform efforts, Indonesia’s tax ratio can improve sustainably,” said Rosmauli on Sunday (July 6), as quoted by kontan.co.id.

In an effort to improve tax ratio performance, the DGT is implementing four main strategies. First, expanding the tax base by maximizing the use of data and technology, including through the modernization of the tax administration system (Coretax).

Second, encouraging voluntary compliance through taxpayer education, accessible services, and a partnership-based approach.

Third, enforcing tax laws fairly and proportionately to ensure equity in tax obligations.

Lastly, strengthening coordination with other institutions through data exchange and joint oversight. (KEN)