The government has set a tax revenue target of IDR 2,591.4 trillion in the 2027 Draft State Budget (RAPBN), up IDR 233.7 trillion, or around 9.9%, from the 2026 state budget target of IDR 2,357.7 trillion. The target is part of the government’s efforts to achieve state revenue of IDR 3,426.03 trillion in 2027. At the same time, the government is targeting a budget deficit of IDR 671.16 trillion, equivalent to 2.40% of gross domestic product (GDP).
To achieve the target, the government is not relying solely on expanding the tax base. The use of data, technology, and system integration will form part of its strategy to optimize revenue collection.
Ministry of Finance Expert Staff for Tax Regulations and Law Enforcement Iwan Djuniardi said the government would develop an interconnected tax system capable of generating data automatically. The concept is known as a natural system.
Under the system, an economic activity can generate data that is then used for other tax processes. One example is withholding tax certificates.
“The withholding agent itself will naturally provide the data,” Iwan said during a discussion in Jakarta recently.
Under the system, compliance will no longer depend solely on taxpayer reporting. Recorded transaction data can be used by the tax authority to supplement taxpayer information.
Coretax and Data Utilization
Coretax is one of the key instruments in the strategy. The tax administration system enables the government to connect various data sources to obtain a more comprehensive picture of taxpayers’ profiles and activities.
According to Iwan, Coretax has contributed to higher revenue, particularly from individual taxpayers. He said revenue from this segment had increased by around 129%, from approximately IDR 5 trillion to around IDR 12 trillion.
In addition to internal data, the tax authority will use third-party data to identify high-risk taxpayers. The focus will be on taxpayers with low compliance levels and significant tax potential.
This risk-based approach allows audits and enforcement measures to be directed at taxpayers with the greatest potential impact on revenue.
Intensification and Extensification
Revenue optimization will be pursued through intensification and extensification. Intensification targets taxpayers already within the tax system but with indications of unfulfilled or inaccurately reported tax obligations. One area of focus is under-invoicing. The tax authority will also use technology to monitor transactions related to transfer pricing.
Meanwhile, extensification will focus on identifying economic activities that have not yet been recorded in the tax system. Both approaches are important because potential revenue comes not only from economic activities that have not been taxed, but also from transactions that are not yet fully reflected in tax data.
The data-driven strategy will also be applied to non-tax state revenue (PNBP), particularly in the mining sector. Iwan said the government was using the Mineral and Coal Information System (Simbara) to monitor mining activities. The oversight involves a joint process among government agencies.
The government can also apply an autoblocking mechanism to parties that have not fulfilled their obligations. Under this approach, compliance can become part of the process for granting permits or access to economic activities.
The government will also strengthen oversight of sectors with significant economic value, including manufacturing, trade, and the digital economy. According to Iwan, there is still room to optimize tax collection from the digital economy. The growth of digital transactions is generating more economic activity that needs to be reflected in the tax system.
Data integration is therefore essential to ensure that digital economic activities can be identified and treated in accordance with tax regulations.
From Enforcement to Engagement
Revenue optimization will not rely solely on law enforcement. The government is also promoting cooperative compliance and the Tax Control Framework (TCF). Under this approach, tax risks are discussed from the outset rather than after disputes or violations arise. Taxpayers and the tax authority can discuss transactions and their tax treatment and ensure that the agreed treatment is reflected in tax returns (SPT).
“Tax risks are discussed from the outset, not at the end,” Iwan said.
Iwan described the approach as a shift from enforcement to engagement, or from a cops-and-robbers model toward justified trust. Through this approach, the government aims to improve compliance while reducing the potential for tax disputes.
Supporting the State Revenue Target
The IDR 2,591.4 trillion tax revenue target is part of the government’s IDR 3,426.03 trillion state revenue target for 2027. Meanwhile, state spending is planned at IDR 4,097.19 trillion, resulting in a targeted deficit of IDR 671.16 trillion, or 2.40% of GDP.
The IDR 233.7 trillion increase in the tax revenue target from the 2026 state budget target makes revenue optimization crucial to maintaining the fiscal position. The government will rely on data utilization, technology, risk-based oversight, tax base expansion, and improved compliance to achieve the target.
The strategy includes monitoring high-risk taxpayers, uncovering under-invoicing and potential transfer pricing irregularities, utilizing third-party data, overseeing the digital economy, and integrating systems in the mining sector.
Through these measures, the government aims to increase revenue without relying solely on changes in tax rates, but by ensuring that economic activities forming the tax base are properly recorded and their tax obligations fulfilled.
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