Indonesia’s tax revenue realization grew 12.3% year-on-year (y/y) to Rp78.5 trillion – which includes tax income from the oil & gas sector – in January 2018 supported by accelerating economic growth and higher commodity prices. However, there remain major concerns about Indonesia’s tax revenue realization and the country’s tax buoyancy as well as tax-to-GDP ratio.

Yon Arsal, Director of Tax Revenue and Compliance at the Directorate General of Taxes, said as such Indonesia’s tax buoyancy continued to weaken (a trend that started in 2011 when commodity prices plunged heavily). This weakening trend reflects the tax office’s declining capability to tap the country’s tax potential.