Indonesia will not introduce new taxes until the national economy reaches 6% GDP growth, Finance Minister Purbaya Yudhi Sadewa said while also announcing the replacement of eight tax officials at the Directorate General of Taxes (DJP) after the discovery of large tax refunds in the system (12/05).

The policy signals the government’s focus on supporting economic growth while tightening oversight within Indonesia’s tax authority. The reshuffle followed concerns over tax restitution practices that were considered irresponsible by the Finance Ministry.

Government Delays New Taxes to Support Economic Recovery

Purbaya stated that the government would not add new tax burdens on businesses or the public before Indonesia achieves 6% economic growth.

The Finance Minister’s approach received support from economists who believe tax expansion should not become the government’s main priority under current economic conditions.

Fakhrul Fulvian, Chief Economist at Trimegah Sekuritas Indonesia, said the government should focus on improving tax compliance and maximizing revenue from the existing taxation system.

“In the current conditions, adding new taxes should not be a priority. The main focus must be directed at increasing the effectiveness of revenue from the existing system, especially through increased tax compliance,” Fakhrul stated in a written brief.

Finance Ministry Replaces Eight Tax Officials

Purbaya officially replaced eight Echelon II and III officials within the Directorate General of Taxes after identifying large tax refund cases.

The reshuffle targeted several strategic offices, including units responsible for large taxpayers and publicly listed companies.

“We detected who had the largest refunds. So, we rotated them so they understand that granting refunds must be more responsible in the future,” Purbaya told reporters at the Finance Ministry headquarters in Jakarta.

He also warned that weak tax performance could directly affect Indonesia’s fiscal condition.

Economists Highlight Trust as Key to Tax Collection

Fakhrul said the effectiveness of taxation depends on public trust rather than tax rates alone.

“Taxes are ultimately not just about rates, but about trust. Without trust, fiscal instruments will not work optimally,” he said.

He also encouraged the government to formalize the informal sector to naturally expand the country’s tax base.

Purbaya Reminds Officials of State Responsibility

During the inauguration of the new tax officials, Purbaya reminded them that their actions represent the state and could affect the country and the presidency.

“Do not forget, you represent the state. If there is a mistake or an unwise action, the impact goes straight to the country, and even to the President. That is what we must guard,” Purbaya said.

PHOTO: MINISTRY OF FINANCE

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