Tax Revenue Challenges and PTKP Review: DJP Gives Up on Shortfall, Cigarette Excise 2026 Confirmed Not to Rise

Today's fiscal policy spotlight focuses on serious challenges in tax revenue and potential tax base policy reform. The Directorate General of Taxes (DJP) is confirmed to be facing a widening revenue shortfall and has even declared it is 'giving up' on chasing the remaining target. If the DJP fails to meet the Rp2,005 trillion tax collection target, the budget deficit risks breaching 3% of GDP. Responding to this situation, the DJP took aggressive steps by summoning large taxpayers to request 'advance tax payments' (ijon pajak). On the other hand, the Finance Minister is reviewing the plan to raise the Non-Taxable Income (PTKP) limit, a policy that raises questions about whether the state will benefit or lose. Meanwhile, the Tobacco Products Excise (CHT) for 2026 is confirmed not to increase, though Customs remains optimistic that cigarette production will be controlled. This summary will cover the tax shortfall challenges, the DJP's efforts, and the PTKP reform review.

The DJP confirmed that the tax revenue shortfall will widen, and the DJP has even stated "giving up" (angkat tangan) on chasing the remaining revenue target. The DJP's failure to meet the tax collection target of Rp2,005 trillion risks causing the budget deficit to breach 3% of GDP. This risk raises concerns about fiscal stability. To pursue the remaining revenue at the end of the year, the DJP took the aggressive step of summoning large taxpayers to request advance tax payments (ijon pajak).

In parallel with revenue efforts, the Finance Minister is reviewing the plan to raise the Non-Taxable Income (PTKP) limit. This review evaluates the fiscal impact and potential loss or gain for state revenue, where an increase in PTKP potentially reduces Income Tax (PPh) revenue but strengthens public purchasing power.

In the excise sector, the cigarette excise (CHT) for 2026 is confirmed not to increase. Nevertheless, Customs expressed optimism that cigarette production will remain under control according to the target, providing certainty to the tobacco industry.

The latest news has major implications for fiscal stability and future tax policy. The DJP's failure to meet the target, which risks breaching the 3% deficit limit, implies the need for strict budget efficiency and fundamental changes in revenue strategy. The aggressive 'advance tax payment' measure implies liquidity pressure on large taxpayers, but provides potential short-term additional revenue. Meanwhile, the review of the PTKP increase implies a potential significant change in the tax base, where if increased, the potential reduction in PPh revenue must be balanced with the positive effect on public purchasing power.

Overall, the fiscal authority is in a dilemma: limited fiscal space is exacerbated by the tax collection shortfall that risks breaching the 3% deficit limit. The DJP is responding with extra-effort actions like 'advance tax payments', but the government is also considering PTKP reform which could reduce PPh revenue to strengthen purchasing power. The stability of the 2026 CHT policy provides certainty to the tobacco industry amidst the uncertainty of tax revenue.