Finance Minister Purbaya Yudhi Sadewa has affirmed that there will be no tax amnesty policy during his tenure. The government will instead focus on improving tax collection and strengthening compliance on a sustainable basis.
The policy direction marks a shift away from an amnesty-based approach toward stronger tax administration, oversight, and data integrity. Ending reliance on tax amnesty is also important to ensure fairness for taxpayers who have consistently fulfilled their obligations.
Stronger Oversight
Tax revenue performance in the first half of 2026 showed a significant improvement. As of the end of July 2026, tax revenue reached IDR 1,209.6 trillion, equivalent to 51.31% of the 2026 state budget target of IDR 2,357.7 trillion. Revenue grew by nearly 30% year-on-year, without any tax rate increases or the introduction of new types of taxes during the period.
The increase was supported, among other factors, by intensified oversight and improvements in tax administration. The Ministry of Finance rotated officials at the echelon II, III, and IV levels to align human resources with tax collection needs. The government has also taken action against employees suspected of misconduct to reduce potential revenue leakages.
The tax base is also being expanded to cover the digital economy. More than 230 digital platform entities have been designated as tax collectors for consumer transactions.
Tax administration is also being strengthened through the implementation of the Coretax administration system. The system enhances the tax authority’s ability to integrate third-party data and identify potential unmet tax obligations.
The Directorate General of Taxes (DGT) said Coretax can help map transaction anomalies more comprehensively. The system is projected to expand the tax base by up to two million new taxpayers who were previously beyond the reach of conventional oversight systems.
The strengthening of the system will continue through the use of Artificial Intelligence and the implementation of the Foreign Digital Transaction Tax Collection System (SPP-TDLN) in 2027. These measures are aimed at narrowing opportunities for cross-border tax avoidance.
Risks of Repeated Tax Amnesty
The decision not to rely on tax amnesty is consistent with the experience of several countries. International tax studies, including those by the International Monetary Fund (IMF), indicate that tax amnesty programs not accompanied by tax administration reforms tend to have limited long-term impact on compliance.
Tax amnesty programs can generally increase revenue in the short term. However, without improvements to tax administration and oversight, such gains are difficult to sustain.
The experiences of Argentina and Turkey demonstrate the risks associated with repeated tax amnesty programs. Such policies can weaken voluntary compliance and reduce the tax-to-GDP ratio.
Repeated tax amnesty programs can also raise fairness concerns. Compliant taxpayers may feel disadvantaged when taxpayers who have failed to meet their obligations receive relief through amnesty programs.
From a behavioral perspective, frequent amnesty programs can create moral hazard. Taxpayers may delay fulfilling their obligations in the expectation that the government will offer another amnesty in the future.
Tax amnesty can produce better results when used selectively as part of a transition toward a stronger tax system. Ireland in the late 1980s is one example often examined, when its amnesty program was accompanied by major changes in the collection of tax arrears.
Cooperative Compliance and Tax Control Framework
In addition to strengthening oversight, the government has begun promoting the cooperative compliance mechanism (CCM). The approach shifts the relationship between the tax authority and large taxpayers from post-filing audits toward more proactive and transparent risk management.
One of the key instruments under CCM is the tax control framework (TCF). TCF is a governance and internal control framework that helps companies identify, assess, and manage tax risks from the outset of their business processes.
In the second half of 2026, the DGT began testing the implementation of TCF at several strategic entities, including state-owned enterprises such as Pertamina, PLN, and Pelindo.
For large taxpayers that adequately implement TCF, the approach can provide greater tax certainty. Through CCM, companies can discuss material and complex tax issues with the DGT before filing their tax returns (SPT).
This preventive approach can reduce the potential for disputes, administrative penalties, and unnecessary audits. At the same time, companies have an opportunity to address tax issues before they escalate into disputes.
Strengthening Corporate Tax Compliance
The government’s policy shift needs to be followed by changes in tax management strategies at the corporate level. At least three measures warrant attention.
First, companies need to strengthen their tax control framework. Large companies and multinational business groups need to move from reactive compliance toward a proactive approach. Implementing TCF can help ensure consistency in financial, tax, and customs data across all entities within a group. Synchronizing data before filing is also important to reduce potential discrepancies that could be identified through the Coretax oversight system.
Second, companies need to review their transfer pricing documentation. As oversight of business groups becomes increasingly integrated, companies need to ensure that transactions with related parties have a clear business basis and are supported by adequate documentation.
Pricing methodologies, commercial rationale, and evidence demonstrating the arm’s-length nature of transactions need to be prepared consistently. Transfer pricing documentation should no longer be treated merely as a formality to meet tax return requirements, but must also support the company’s position in the event of a tax audit or dispute.
Third, companies need to increase transparency in cross-border data and transactions. As tax information exchange expands, companies and taxpayers engaged in cross-border activities need to adjust their compliance systems. The implementation of the common reporting standard (CRS), plans to introduce the crypto asset reporting framework (CARF), and stronger cross-border collection of tax arrears will enhance the tax authority’s ability to trace assets and transactions.
Taxpayers should therefore ensure that their cross-border business structures and transactions have a clear economic basis and are supported by adequate documentation. Communication with the tax authority can also take place at an early stage to obtain clarity on complex tax issues.
Conclusion
Indonesia’s tax policy direction in 2026 points to reduced reliance on tax amnesty and a greater focus on strengthening tax administration, oversight, and data-driven compliance.
For companies, the shift calls for a move from reactive compliance strategies toward more structured and preventive systems. Strengthening the tax control framework, ensuring data consistency, maintaining transfer pricing documentation, and increasing transaction transparency are becoming increasingly important to manage tax risks.
In this context, tax certainty will no longer depend solely on amnesty policies, but increasingly on the quality of the tax administration and compliance systems built on a sustainable basis.
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