Business · Economy · 3 hrs ago

Indonesia sets 9% tax-to-GDP target for 2027

Indonesia sets 9% tax-to-GDP target for 2027

Indonesia aims to raise tax revenue to 9% of GDP in 2027, according to tax chief Bimo Wijayanto.

The target is part of the government’s effort to increase state revenue, while Indonesia’s tax-to-GDP ratio has remained largely unchanged in recent years.

Gross tax receipts are growing by about 13% to 14%, faster than the roughly 8% combined growth expected from the economy and inflation.

Bimo said better tax administration, including the Coretax system, stronger analysis and enforcement, has helped lift receipts.

He also said the government must weigh tax changes against the need to fund development and keep the budget deficit below 3% of GDP.

The 2027 target is one effort to raise revenue, but Bimo did not say whether it would be met or describe further steps.

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What people are saying

Bimo WijayantoDirector General of Taxes
This is the first time in our history that we have dared to set a target of 9 percent of GDP in the 2027 state budget.
via CNN Indonesia
If the economy grows by 5.5 percent and inflation is 2.5 percent, that is 8 percent; we are growing about 6 percent above that natural economic and inflation growth.
via Detik
Hashim DjojohadikusumoBoard of Advisors, Prasasti
Our revenue ratio to GDP is very low. Thirteen years ago it was 12 percent of GDP, and today it is still 12 percent of GDP.
via Detik
We are collecting 6 percent per year less revenue than we should be able to collect. That is equivalent to Rp1,500 trillion per year that we should be able to collect now.
via CNN Indonesia