Business · Economy · 2 hrs ago
ADB Sees Indonesia Escaping Middle-Income Trap, but Flags Low Tax Revenue
The Asian Development Bank sees Indonesia’s economy continuing to advance and believes the country can escape the middle-income trap.
The goal is part of Indonesia’s Golden Indonesia 2045 vision.
The bank’s Indonesia director, Bobur Alimov, points to improvements over the past two decades and says Indonesia’s debt remains at a manageable 30% to 40% of GDP.
But Indonesia’s tax revenue has stayed near 9% for about 20 years, among the lowest levels in ASEAN; Cambodia’s rate has risen from about 9% to 18%.
Alimov says the government is working to improve tax compliance, particularly among large companies, rather than focusing on small earners.
Higher tax revenue could give the government more to spend and support economic growth.
The government is also pursuing infrastructure, education and child nutrition programs, while aiming for growth of 8% to 9% to help the country reach its 2045 goal.
The Asian Development Bank’s director for Indonesia said the country has strong prospects of escaping the middle-income trap.
Bobur Alimov said Indonesia’s development over the past two decades supports his positive outlook.
He said Indonesia’s tax revenue ratio has remained around 9% for 20 years, leaving it among the lowest in ASEAN.
Alimov said improving tax collection, especially from large companies, could support fiscal stimulus and economic growth.
He cited government programmes in infrastructure, education and child nutrition as efforts to speed growth.
- Who
- The Asian Development Bank and its director for Indonesia, Bobur Alimov.
- What
- Alimov said Indonesia has strong prospects of escaping the middle-income trap, while flagging low tax revenue.
- When
- Alimov spoke on Wednesday, October 21, 2026.
- Where
- Makassar, Indonesia.
- Why
- He cited Indonesia’s development over two decades and ongoing government programmes, while saying stagnant tax revenue remains a fiscal concern.
This story does not have two clearly opposing sides.
Alimov said Indonesia’s tax revenue ratio was around 9%.
Alimov spoke in Makassar about Indonesia’s economic prospects and tax revenue.
- Forecast
- ADB director Bobur Alimov said Indonesia has strong prospects of escaping the middle-income trap.
- Tax revenue ratio
- Around 9% for 20 years, according to Alimov.
- Comparison
- Cambodia’s tax revenue ratio rose from around 9% 20 years ago to around 18%.
- Debt-to-GDP ratio
- Indonesia’s ratio is around 30–40%, according to Alimov.
- Growth target
- The government aims for growth of around 8–9% to escape the middle-income trap.
What people are saying
Indonesia’s tax revenue 20 years ago was 9%, and 20 years later it is 9%.
So, Indonesia is the lowest among ASEAN countries in terms of tax collection or revenue.
No, it will only move up. Again, it will only move up.