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KN-JAKARTA, Indonesia’s current tax revenue performance is not yet able to meet the needs of the State Budget (APBN). This revenue shortfall is considered to risk limiting the government’s fiscal space amidst significant spending needs.
This was revealed in a Semester I-2026 Economist Survey conducted by the Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) among 85 economists from within and outside the country. The LPEM FEB UI survey was conducted from February 24 to March 9, 2026, and involved economists from academia, research institutions, the private sector, and international institutions.
A total of 42 respondents (49%) rated tax revenues as “inadequate,” while 32 respondents (38%) stated that their performance was “very inadequate” compared to state budget needs. Only 11% of respondents rated tax revenues as meeting or exceeding expectations.
Overall, the average assessment score reached -1.20, indicating a strong consensus that tax revenues are experiencing a significant shortfall.
According to experts, weak tax performance will limit the government’s ability to finance public services, infrastructure development, and social programs, especially amidst significant spending commitments.
Furthermore, the opportunity to increase the tax ratio in the next two to three years is considered small without significant policy reforms. The majority of respondents are pessimistic that the current tax system can generate substantial revenue increases in the short term.
The survey also identified several key obstacles to increasing tax revenue. The most dominant factors are weak economic fundamentals and a high informal sector, cited by 66 respondents. This condition makes it difficult to expand the tax base because many economic activities occur outside the formal system.
The next obstacle is administrative capacity and taxpayer compliance, highlighted by 45 respondents. Meanwhile, the effectiveness of law enforcement and audits, as well as political economic factors, were each cited by 36 respondents as additional obstacles.
Weakness in tax revenue is also considered a risk to Indonesia’s fiscal sustainability. Experts highlight that limited state revenue capacity could pressure Indonesia’s credit profile, especially if financing needs remain high.
The survey findings indicate that strengthening the tax system through structural reforms, increasing compliance, and broadening the tax base are key to maintaining fiscal stability and supporting medium-term economic growth.
Photo by: Flazztax.com
