Indonesia's Tax Authority: First-Half 2026 Results and Reform Plans
The Indonesian authorities have released preliminary results on the execution of tax policy for the first half of 2026. Despite solid growth in tax revenue, the annual targets are expected to fall somewhat short by year-end. To improve collection, the government intends to press ahead with modernizing tax administration, tighten enforcement of tax law, and amend a number of regulations.
Growth in Tax Revenue
The Directorate General of Taxes (DJP) reported growth in tax revenue in the first half of 2026. According to the agency, by June around Rp 1,060.96 trillion had come into the budget — roughly 45% of the annual target, which the state budget sets at Rp 2,357.7 trillion.
DJP Director General Bimo Wijayanto noted that the positive trend was driven by rising economic activity, greater efficiency in tax administration, and higher receipts across most major tax categories, including corporate income tax, personal income tax, income tax, value-added tax (VAT), and luxury goods sales tax.
Minister of Finance Purbaya Yudhi Sadewa also gave a positive assessment of the tax reform, noting that the changes to the administration system, organizational structure, and staffing of the tax authorities are already producing tangible results.
Year-End Forecast and the Expected Shortfall
Meanwhile, the Ministry of Finance forecasts that, by the end of 2026, tax revenue may come in around Rp 46.9 trillion below the planned level. It could total approximately Rp 2,310.8 trillion, or 98% of the annual target.
At the same time, the Ministry expects the state budget deficit to widen to Rp 734.3 trillion (about 2.85% of GDP), against the originally planned Rp 689.1 trillion (2.68% of GDP). The main reason for the wider deficit will be higher government spending, which is projected to reach Rp 3,942.4 trillion — above the approved budget ceiling.
What the Tax Authority Is Doing
To reduce the potential shortfall in revenue, the government will continue to refine the Coretax digital administration system and improve the effectiveness of the tax authorities.
The Minister of Finance instructed DJP's regional units to provide higher-quality, more responsive service to taxpayers, stressing that better service should support further growth in revenue. He also stated that he would remove dishonest tax officials from their posts.
Tighter Oversight of Tax Reporting
In 2026, DJP will also step up enforcement of tax law. Particular attention will go to the timely payment of periodic tax installments, the filing of annual tax returns, and verification of the accuracy of the information they contain.
DJP Director of Public Relations Dina Rismawati said the agency has an extensive database for cross-checking information. Where discrepancies are found between a tax return and the available data, taxpayers may be sent requests for clarification.
Taxation of Marketplace Sellers
The Employers' Association of Indonesia (Apindo) has called on DJP and marketplace operators to run a large-scale awareness campaign on the application of Article 22 income tax (PPh Pasal 22) to online sellers.
The chair of Apindo's tax committee, Siddhi Widyaprathama, noted that detailed guidance would help avoid confusion and ensure a smooth transition to the new system for taxing e-commerce.
Revising the Incentive Rules for Local Tax Collection
The Ministry of Home Affairs has reported that it is preparing amendments to Government Regulation No. 69/2010, which governs incentive payments for the collection of local taxes and levies.
According to Agus Fatoni, Director General for Regional Financial Development, the revision is needed because of the entry into force of the Law on Financial Relations between the Central Government and the Regions. The relevant amendments are currently under discussion.
Conclusion
In short, Indonesia's tax policy in the second half of 2026 will focus on improving administrative efficiency and refining digital oversight mechanisms. At the same time, the authorities hope to maintain the positive revenue trend, narrow the projected budget shortfall, and ensure more transparent interaction with taxpayers.
Tighter DJP oversight and the shift to Coretax directly affect foreign company owners in Indonesia, including PT PMA, as well as entrepreneurs selling through marketplaces who fall under PPh Pasal 22. At Legal Indonesia, we can take on the following:
Tax accounting and reporting: we handle monthly and annual reporting for PTs and PT PMAs and keep track of the deadlines for periodic payments.
Preparing and filing the SPT: we gather the data, calculate the tax liability, and file the annual return on time.
Adapting to Coretax: we bring the company's documents and internal processes into line with the requirements of the updated administration system.
Support during DJP inquiries: we prepare explanations and supporting documents if the tax office finds discrepancies between your return and its own data.
Taxation of marketplace sellers: we work through how PPh Pasal 22 applies to a specific business and set up correct accounting for such income.
If you are not sure whether your company is ready for the tighter audits in the second half of 2026, get in touch: we will review your current tax reporting and advise on what needs to be adjusted.
