Indonesia’s Audit Board (Badan Pemeriksa Keuangan/BPK) has highlighted weaknesses in the Directorate General of Taxes’ (DGT) active tax collection process, identifying them as one of the reasons tax receivables have continued to grow over the past three years. The findings were disclosed in the audit report on the internal control system and compliance for the 2025 Financial Report of the Central Government.
BPK recorded that outstanding tax receivables increased from IDR 67.69 trillion in 2023 to IDR 73.72 trillion in 2024, before reaching IDR 75.33 trillion at the end of 2025. During 2025, the DGT recorded an additional IDR 108.71 trillion in tax receivables while collecting IDR 98.50 trillion, resulting in a continued increase in the overall outstanding balance.
BPK also found that tax receivables totaling IDR 5.18 trillion had exceeded the legal collection period. Of this amount, only IDR 1.93 trillion had been written off, leaving IDR 3.25 trillion in expired receivables as of December 31, 2025. According to the BPK, write-offs are carried out after all collection measures have been exhausted and the state’s legal right to collect has expired. Under Minister of Finance Regulation Number 117 of 2024, tax receivables may only be written off if included in the official list of proposed write-offs.
BPK further revealed that the DGT had not consistently carried out active collection within the prescribed deadlines. Active collection measures include issuing warning letters, serving distress warrants, conducting asset seizures, and auctioning confiscated assets where necessary. In 2025, warning letters were generated automatically through the Coretax system, after which state tax bailiffs were responsible for continuing the collection process if arrears remained unpaid.
BPK also identified 4,740 tax assessments classified as bad-quality receivables, valued at IDR 5.84 trillion, that had not been handled in accordance with applicable regulations. These receivables were more than 1,095 days (three years) overdue after the related tax assessments had become legally binding (inkracht).
Based on the analysis and sampling of 2025 tax receivables totaling IDR 83.93 trillion, 46 assessments were worth IDR 52.44 billion with no warning letters issued, 280 assessments were worth IDR 1.5 trillion with no distress warrants issued, and 547 assessments were worth IDR 341.3 billion with no distress warrants served. Additionally, the BPK found 2,798 assessments totaling IDR 2.82 trillion without seizure orders, and 1,069 assessments totaling IDR 1.12 trillion where no asset seizure had been carried out despite seizure orders having been issued.
The audit also found shortcomings in the handling of taxpayers listed under the 2025 compliance priority target list (daftar sasaran prioritas compliance/DSPC), with 14 taxpayers not receiving warning letters and 43 not receiving distress warrants.
In response, the DGT's Sub-directorate of Tax Collection explained that, in 2025, they prioritized collection for taxpayers in the DSPC. Collection related to certain tax assessment letters and notifications of tax due (surat pemberitahuan pajak terutang/SPPT) could not proceed as the tax collection letters had not yet been issued. BPK also cited operational challenges, including taxpayers who could not be located and cases where no identifiable assets or bank accounts were available for seizure, requiring tax bailiffs to conduct further asset tracing.
Also read:
Patriot and Merah Putih Bonds: What Is the Tax Treatment?
The Chart of Accounts for Coretax Reporting
Article 26 Withholding Tax on Foreign Taxpayers
