The Directorate General of Taxes (DGT) at the Ministry of Finance is managing tax refunds while balancing state revenue needs and taxpayers’ rights. DGT Director General Bimo Wijayanto said refunds of tax overpayments would continue to comply with prevailing laws and regulations as well as standard operating procedures. The policy comes as the government seeks to maintain the state budget deficit at 1.24% of gross domestic product (GDP) as of September 2026.
“We comply with all applicable legal and regulatory requirements, follow our SOPs, and uphold taxpayers’ rights,” Bimo said at the DGT headquarters in Jakarta on Thursday (October 15, 2026).
Tax refund management is also intended to support economic activity. The government has set a target of achieving 8% economic growth under President Prabowo Subianto’s administration. Reaching that target requires support from investment, exports, and household consumption.
Finance Minister Suahasil Nazara has instructed the tax authority to simplify refund procedures for micro, small, and medium enterprises (MSMEs), labor-intensive industries, and export-oriented companies. The policy aims to safeguard corporate cash flow so that business operations, expansion, and employment can continue without disruption.
As of the end of September 2026, tax refunds totaled IDR 198.71 trillion, down 38.08% from IDR 320.91 trillion in the same period in 2025. The decline was mainly driven by lower refunds of value-added tax (VAT), sales tax on luxury goods, and income tax.
| Tax Category | September 2025 | September 2026 | Year-on-Year Change |
| Income tax | IDR 95.12 trillion | IDR 59.08 trillion | -37.88% |
| VAT and luxury goods sales tax | IDR 224.75 trillion | IDR 137.79 trillion | -38.69% |
| Other taxes | IDR 1.04 trillion | IDR 1.84 trillion | +76.92% |
| Total tax refunds | IDR 320.91 trillion | IDR 198.71 trillion | -38.08% |
Source: Ministry of Finance, September 2026 APBN KiTa report.
The decline in tax refunds has raised concerns among businesses. The Indonesian Employers Association (Apindo) and players in the construction industry have warned that delays in refund disbursements could disrupt corporate liquidity.
The impact could be more pronounced in labor-intensive manufacturing industries, where net operating profit margins typically range from 3% to 5%. Delays in refunds of 11% VAT could reduce companies’ available cash, potentially constraining operating expenditure and recruitment.
The government has stated that it will not apply a uniform policy to all taxpayers. The DGT will use risk-based analysis to expedite refunds for taxpayers considered low-risk.
Minister of Finance Regulation No. 28/2026
The mechanism for preliminary tax refunds is governed by Minister of Finance Regulation (PMK) No. 28 of 2026. The regulation strengthens the use of risk-based compliance in granting access to refund facilities.
Under the regulation, taxpayers are classified according to specific criteria and requirements. Taxpayers meeting certain criteria, as stipulated in Article 17C of the General Provisions and Tax Procedures Law (UU KUP), must satisfy compliance requirements, including having no history of tax-related criminal offenses and no record of late tax payments. They must also submit financial statements audited by a public accountant, with an unqualified opinion, for three consecutive years.
Meanwhile, taxpayers meeting certain requirements under Article 17D of the UU KUP include corporate taxpayers with annual turnover of no more than IDR 50 billion and tax overpayments of no more than IDR 1 billion. This category may qualify for preliminary tax refunds without having to meet the audit requirement for an unqualified opinion.
The DGT also required taxpayers previously classified as low-risk to re-register between June 1 and 10, 2026. Those who failed to re-register would be subject to regular tax audits, which generally take longer to complete.
Tax Revenue Strategy
Despite the decline in tax refunds, tax revenue has increased. The Ministry of Finance recorded tax revenue of IDR 1,607.6 trillion as of September 30, 2026, up 24.1% from the same period a year earlier.
The amount represents 68.2% of the 2026 state budget (APBN) tax revenue target of IDR 2,357.7 trillion.
| Revenue Component | September 2026 Realization | Year-on-Year Growth | Target Attainment |
| Non-oil and gas income tax | IDR 809.3 trillion | +17.6% | 70.1% |
| VAT and luxury goods sales tax | IDR 683.3 trillion | +38.6% | — |
| Oil and gas income tax | IDR 43.6 trillion | +128.2% | — |
| Land and building tax and other taxes | IDR 71.4 trillion | -24.8% | 48.6% |
| Total tax revenue | IDR 1,607.6 trillion | +24.1% | 68.2% |
Source: Ministry of Finance, September 2026 APBN KiTa report.
Tax revenue growth has been supported by domestic economic activity, household consumption, and improvements in tax administration through the implementation of the Coretax Administration System.
Nevertheless, the DGT still needs to collect approximately IDR 750.1 trillion in the fourth quarter of 2026 to meet its annual target. To boost revenue, the agency is strengthening digital oversight and expanding its use of tax data.
One of its measures is the issuance of 454,377 request for explanation of data and/or information (surat permintaan penjelasan atas data dan/atau keterangan/SP2DK). The letters are issued based on risk analysis within the Coretax system to follow up on discrepancies between data on economic activity and taxpayers’ reported tax information.
The DGT is also broadening the tax base through a tax collection system for foreign digital transactions (Sistem Pemungutan Pajak atas Transaksi Digital Luar Negeri/SPP-TDLN) and the collection of Article 22 income tax through marketplace operators at a rate of 0.5%, which took effect in October 2026.
The government is also granting waivers of administrative tax penalties of up to 100% under Director General of Taxes Decree No. KEP-239/PJ/2026, which implements Minister of Finance Regulation No. 71 of 2026.
The policy is intended to encourage taxpayers to settle outstanding tax liabilities and improve voluntary compliance. The penalty waivers are expected to reduce compliance costs and provide legal certainty for businesses without requiring them to enter into tax disputes.
Increasing revenue and managing tax refunds are part of the government's efforts to raise the tax-to-GDP ratio. President Prabowo Subianto has set a target of increasing the ratio to between 12% and 13% over the coming years, from its current level of around 9%.
To support this goal, the DGT is reviewing the non-taxable income threshold (penghasilan tidak kena pajak/PTKP). The threshold currently stands at IDR 54 million per year. According to a study drawing on data from the Organisation for Economic Co-operation and Development (OECD), this amount is equivalent to approximately 65% of GDP per capita. This is considered one of the factors limiting the number of people included in the income tax base.
The government has stated that any adjustment to the non-taxable income threshold will be made cautiously to avoid undermining household purchasing power, which remains one of the key drivers of economic growth.
Also Read:
Suahasil Calls for Faster Tax Refunds to Support Business Cash Flow
Tax Refunds in the Finance Minister’s Spotlight
Tax Refunds Are a Right, Not a Fiscal Favor
Editor: Thomas Rizal
