Indonesia’s Finance Minister Purbaya Yudhi Sadewa acknowledged on Monday, February 9, 2026, that determining an ideal tax ratio for the 2026 State Budget remains a challenge. He stated that the country’s tax structure is “rigid,” making rapid adjustments difficult.
Tax Ratio Challenges
According to Minister Purbaya, there is no clear answer to what the ideal tax ratio should be, admitting, “It’s hard to determine the ideal figure, I don’t understand.” He noted that Indonesia’s tax ratio has remained largely unchanged for decades despite increasing government expenditures.
While acknowledging the difficulties, Purbaya indicated that an 11-12 percent tax ratio would be sufficient to support the State Budget, with 11-11.5 percent considered preferable. He emphasized that increasing the tax ratio will require significant effort, including upgrades to existing systems and changes in the conduct of tax officials.
The government is currently aiming to raise the tax ratio from around 9 percent to 11-12 percent this year. Success, Purbaya explained, depends not only on economic growth but also on the effectiveness of the tax system and the integrity of those administering it.
Historical Fluctuations
Indonesia’s tax ratio has seen fluctuations in recent years. It stood at 10.08 percent in 2024, then decreased to around 9 percent in 2025. Prior to that, the ratio rose to 10.39 percent in 2022 and 10.31 percent in 2023, driven by tax reforms and strong commodity prices.
Despite the recent weakening of the tax ratio, Purbaya expressed optimism that internal improvements within the Ministry of Finance – including employee rotation, strengthened management, and administrative improvements – could help boost revenue collection in 2026.
Frequently Asked Questions
What is Indonesia’s current tax ratio target?
The government is aiming to raise the tax ratio from around 9 percent to 11-12 percent this year.
Why is it difficult to determine an ideal tax ratio?
According to Finance Minister Purbaya Yudhi Sadewa, Indonesia’s tax structure has high rigidity, making it difficult to change the tax ratio quickly.
What steps is the Ministry of Finance taking to improve the tax ratio?
The Ministry of Finance is implementing internal improvements, including employee rotation, strengthening management, and administrative and supervisory system improvements.
As Indonesia navigates these fiscal challenges, will internal improvements within the Ministry of Finance be enough to achieve the targeted increase in the tax ratio?
