Indonesia’s net tax revenue totaled Rp 1,459.3 trillion for the January-October period, marking a 3.9% year-on-year (yoy) decline compared to the Rp 1,517.54 trillion collected during the same period last year. The Directorate General of Taxes has now shed light on the primary factors contributing to this downturn.
According to Bimo Wijayanto, the Director General of Taxes at the Ministry of Finance, the drop in net tax collection is primarily attributed to a significant increase in tax refunds. These refunds soared from Rp 249.59 trillion in the previous year to Rp 340.52 trillion as of October 2025.
To clarify, tax refunds represent the government’s repayment of overpaid taxes to taxpayers. This mechanism ensures that if a company or individual remits more tax than legally required, the state is obligated to return the excess amount.
Bimo emphasized this point during a hearing with Commission XI of the House of Representatives (DPR) on Monday (24/11), stating, “Refunds surged by approximately 36.4% year-on-year. Consequently, despite a positive trajectory in gross tax revenue, the net collection still recorded a decrease.” This highlights the substantial impact of refunds on overall tax performance.
A detailed breakdown reveals the categories driving this surge in tax refunds:
- Corporate Income Tax (PPh Badan) refunds amounted to Rp 93.80 trillion, an 80% year-on-year increase from Rp 52.13 trillion in the corresponding period last year.
- Domestic Value Added Tax (PPN DN) refunds climbed by 23.9% year-on-year, reaching Rp 238.86 trillion.
- Refunds for other taxes also saw a significant rise, up 65.7% year-on-year to Rp 7.87 trillion, compared to Rp 4.75 trillion in the previous year.
Bimo further elaborated, “The majority of these refunds are attributed to Corporate Income Tax and Domestic VAT. This dominance explains why the net growth correction is considerably deeper when compared to the gross revenue figures.”
Intriguingly, Bimo also pointed out that this rise in tax refunds carries a paradoxical positive impact. He explained that the increased refunds signal a return of funds to the public and, critically, enhance the cash flow available to businesses and entrepreneurs.
“The surge in refunds means that the cash received by the community, including the private sector, has increased,” Bimo stated, projecting optimism. “This injection of liquidity is anticipated to stimulate economic activity and foster overall growth within the economy.”
Summary
Indonesia’s net tax revenue for January-October totaled Rp 1,459.3 trillion, marking a 3.9% year-on-year decline compared to the previous year. The Directorate General of Taxes identified a significant 36.4% surge in tax refunds as the primary cause, with refunds escalating from Rp 249.59 trillion to Rp 340.52 trillion.
This increase in refunds was largely driven by an 80% rise in Corporate Income Tax (PPh Badan) refunds and a 23.9% increase in Domestic Value Added Tax (PPN DN) refunds. While impacting net collection, the Director General noted that these refunds also enhance cash flow for businesses and the public, potentially stimulating economic activity.
