KBRN, Jakarta: The Indonesian government will increase state revenue without new taxation policies. Indonesian Finance Minister, Sri Mulyani Indrawati, made this statement during a meeting with the Regional Representative Council (DPD) on Tuesday, September 2, 2025.

Minister Sri Mulyani sees that increasing revenue is usually misinterpreted as raising taxes. “The tax rate remains the same, but enforcement and compliance will be improved and organized,” she said.

In this case, taxpayer compliance and convenience will be improved. Meanwhile, non-taxpayers or economically disadvantaged people will get maximum assistance.

Minister Sri Mulyani exemplified that MSME players with a maximum revenue of IDR 500 million are not subject to corporate income tax (PPh). However, MSMEs with revenues above IDR 500 million to IDR 4.8 billion are only subject to 0.5 percent corporate income tax.

“This policy is favorable to MSMEs,” she said. According to her, this is because the corporate income tax for large companies is 22 percent.

Value-Added Tax (VAT) for health and education is also being exempted. People with less than IDR 60 million per year are also not subject to tax.

According to Minister Sri Mulyani, this tax is based on the principle of mutual cooperation (gotong royong) but must still be appropriately managed. “This is because there are many necessities, but the state budget is limited,” she said.

The 2026 State Budget Draft sets a state revenue target of IDR 3,147.7 trillion, a 9.8 percent increase from the previous year. The primary source of revenue will still come from taxes, which are targeted to reach IDR 2,357.7 trillion next year.

“The state budget will strive to be a reliable instrument for all parties,” said Minister Sri Mulyani. According to her, the government will continuously assess all segments of society’s needs.

Meanwhile, the Executive Director of CORE Indonesia, Mohammad Faisal, encouraged the government to implement fiscal reforms, especially in taxation. “We emphasize the necessity of revoking taxation policies that burden the people, especially the lower-middle class,” he said.

Faisal added that the government must also revise transfer cuts to regions that have led to a surge in regional taxes and levies. According to him, if the government wants to optimize the budget, it must reform its expenditure strategy.

“Eliminate unproductive and wasteful expenditures, including excessive incentives for public officials,” he said.

Instead, Faisal said, expenditures and fiscal incentives should be focused on programs such as job creation for the community. ***

Translator: Gusti Panji Alif Pratama

Editor: Bambang MBKA