Big Spending Puts Pressure on the State Budget

Seven months into 2026, Indonesia's tax revenue target is only halfway reached. As of July 2026, the government had collected Rp1,209.6 trillion (approximately US$68.72 billion), which is 51.31% of the Rp2,537.7 trillion (US$114.18 billion) budget allocated for the year. To meet the goal, an additional Rp1,150 trillion (US$65.34 billion) needs to be collected within the remaining five months. If the target is not met, the state budget will face a deficit.

At a Finance Ministry meeting on September 7, 2026, Harris Turino, a member of the DPR Commission XI responsible for financial matters, called on tax collectors to step up their efforts as the year-end approached. Turino warned that a potential slowdown in tax revenue during this period could widen the budget deficit.

In response, Bimo Wijayanto, Director-General of Taxes, proposed expanding the tax base as a strategy to boost revenue. He highlighted the support provided by the Core Tax Administration System (Coretax), which has added 2 million new taxpayers to the tax base. Wijayanto explained that expanding the tax base would allow authorities to monitor economic activity across a larger population, ultimately helping to increase revenue. He also reported that tax revenue had grown by 12% through July 2026.

While acknowledging the revenue growth, Wijayanto projected that the total tax revenue by year-end would amount to Rp2,310.9 trillion (US$131.3 billion), which is Rp46.9 trillion (US$26.18 billion) lower than the 2026 State Budget's target.