The DJP's Masterstroke: New Fiscal Strategy Amid Shortfall Threats
Taxindo Prime Consulting
Thursday, August 28, 2025 | 14:56 WIB
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Indonesia's economic and fiscal dynamics are continuously shifting. The government is implementing various new policies to optimize state revenue and balance economic growth.
The government has taken several steps to strengthen tax revenue, including tightening regulations on tax refunds (restitusi) and implementing new systems. However, these efforts are being made amid concerns about a widening tax revenue gap or shortfall. The issue of regional fund transfers has also become a focal point, pushing the need for fiscal innovation at the local level.
The government has pursued strategic measures to optimize state revenue amid economic challenges. The Directorate General of Taxes (DJP) is taking proactive steps by adding foreign companies as digital tax collectors and strictly enforcing tax refund requirements to ensure taxpayer compliance. This effort is bolstered by the plan to accelerate the implementation of the Core Tax System, which is expected to capture potential tax from the shadow economy sector.
On the other hand, fiscal challenges also stem from the government's expenditure side, particularly with a 24.7% decrease in the regional transfer budget. This situation prompted the House of Representatives (DPR) to urge regional governments to become more fiscally independent by optimizing Regional Owned Enterprises (BUMD) and Micro, Small, and Medium Enterprises (UMKM) as new sources of income.
Despite various steps taken to strengthen state revenue, concerns about a widening tax revenue gap (shortfall) still loom. If the pace of economic growth falls short of the 5.4% target, the expected tax revenue may not be achieved, requiring the government to seek other solutions to maintain the stability of the State Budget (APBN).
These events reflect the government's primary priorities in managing state finance. The addition of foreign companies as digital tax collectors and the acceleration of the Core Tax System demonstrate the government's serious effort to capture tax revenue from sectors that were previously difficult to reach. Meanwhile, the tightening of tax refunds is a defensive measure to ensure every tax rupiah returns to the state treasury. Conversely, the decrease in regional transfers enforces greater fiscal autonomy, pushing regions to be creative in generating income from BUMDs and UMKMs. However, all these efforts are threatened by the risk of a tax shortfall if economic growth does not meet the target.
The steps taken by the DJP, the DPR, and the government in general underscore the dual challenge facing Indonesia: stimulating economic growth while ensuring optimal state revenue. Businesses, investors, and regional governments must be ready to adapt to strict and independent regulatory changes. The government's success in balancing these two goals will determine the stability and sustainability of the economy in the future.
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