The Directorate General of Taxes (DGT) of the Ministry of Finance has been asked to accelerate the refund of tax overpayments, or tax refund, for Micro, Small, and Medium Enterprises (MSMEs) taxpayers and labor-intensive industries to maintain liquidity and support business continuity.
The instruction was given by the Finance Minister, Suahasil Nazara, as part of the relaxation of tax refund administration. The government considers that these taxpayer groups need cash flow support, therefore the refund of tax overpayments needs to be prioritized.
The Head of the Sub-directorate of Industrial VAT Regulations at the DGT, Endro Tribudi Setijanto, said accelerating tax refunds is a government priority because small business actors and labor-intensive industries are the groups most affected by economic pressures.
According to Endro, faster refunds of tax overpayments can help business actors meet operational needs without waiting too long for the disbursement of funds that are rightfully theirs.
"The Minister's latest instruction takes cash flow into consideration, prioritizing the acceleration of refunds for labor-intensive sectors and small-scale taxpayers. We consider them to be the most affected groups in the economy, so we are asked to process their refunds first," said Endro during the Taxplore UI 2026 National Seminar, Thursday (November 5, 2026).
He explained that the instruction reflects the government's concern for the liquidity needs of the business world, especially groups with limited financial capacity to sustain operational activities.
Two Refund Mechanisms
On the other hand, Endro emphasized that the tax refund policy stipulated in Minister of Finance Regulation (PMK) Number 28 of 2026 is not intended to complicate or limit taxpayers' rights to obtain tax overpayment refunds.
The regulation provides the foundation for the preliminary refund mechanism for compliant taxpayers to differentiate it from the regular refund process, which requires a comprehensive tax audit procedure. Preliminary refund is a facility for certain taxpayers who meet the requirements, especially those with good compliance levels and low-risk profiles.
Through this mechanism, taxpayers do not have to undergo a full tax audit to get a refund of their tax overpayments. The mechanism through an audit requires a longer process because the DGT must examine the taxpayer's fulfillment of tax obligations.
In terms of timeframes, Endro said tax refunds through a review process can be completed in about one month. Meanwhile, refunds through an audit can take up to one year.
This difference in timeframe, according to him, needs to be understood so that the provisions regarding the tax refund mechanism are not perceived as a policy that slows down tax refunds.
"It is indeed perceived by the public as if tax refunds have become difficult because their understanding only captures some parts of the provisions," he said.
Maintaining Business Cash Flow
Previously, Suahasil emphasized that tax refunds are a taxpayer's right that must be processed as soon as possible, especially for business actors who need additional liquidity to run their business operations.
He has instructed the DGT to accelerate the processing of tax overpayment refunds for labor-intensive industries and MSMEs.
"I have instructed the DGT that tax refunds, as a taxpayer's right for industries requiring cash flow, labor-intensive industries, and MSMEs, should be granted as quickly as possible," Suahasil said at a press conference in Jakarta on Friday (October 9, 2026).
Suahasil stated that the government understands the importance of cash flow availability for businesses. Therefore, tax refund administration will be made more flexible so that eligible taxpayers do not have to wait too long to receive their refunds.
According to him, the DGT has also begun implementing the relaxation in tax refund administration.
Amidst the efforts to accelerate tax refunds, total tax refunds realized reached IDR 198.71 trillion as of September 2026.
This amount increased by IDR 6.89 trillion compared to the realization in August 2026, which was IDR 191.82 trillion. Thus, tax refunds grew about 3.59% month on month.
However, this increase in tax refunds is lower than in the same period the previous year.
In August 2025, tax refunds stood at IDR 304.29 trillion, which then increased to IDR 323.92 trillion in September 2025. This means there was an increase of IDR 19.63 trillion, or about 6.45%, in one month.
With the instructions to accelerate and ease tax refund administration, the government hopes that the refund of tax overpayments can provide faster liquidity support for business actors, especially MSMEs and labor-intensive industries that need funds to maintain production activities and create employment.
Also Read:
Tax Refunds Decline, Revenue Targets Pose Challenge
Suahasil Calls for Faster Tax Refunds to Support Business Cash Flow
Tax Refunds Are a Right, Not a Fiscal Favor
Writer: Fiorentina Renata Trixie | Editor: Thomas Rizal
