JAKARTA – Finance Minister Purbaya Yudhi Sadewa firmly opposes the continuation of the tax amnesty program, which he considers to be a third round. He believes that holding tax amnesties too frequently will have a negative impact.
"I'm worried that people will become accustomed to violating tax regulations. This sends a signal to taxpayers that violations are permissible, and there will be another amnesty in the future. If there's a tax amnesty every few years, that's it. Everyone will be smuggling money, and there will be another tax amnesty in three years," he said at the Ministry of Finance office on Friday, September 19.
The discourse on a third round of tax amnesty first emerged in parliament at the end of 2024. The government and the Indonesian House of Representatives (DPR RI) agreed to include the Bill on Amendments to Law Number 11 of 2016 concerning Tax Amnesty in the list of draft proposals for the 2025 Priority Bill Program (Prolegnas).
The first tax amnesty took place in 2016-2017, during which the government claimed it was a one-time initiative to encourage taxpayers to disclose previously unreported assets. 956,793 taxpayers participated in the first tax amnesty, with assets valued at Rp4,854.63 trillion. These asset disclosures earned the state Rp114.02 trillion in redemption, equivalent to 69 percent of the Rp165 trillion target.
The government then repeated the program under the Voluntary Disclosure Program (PPS) from January 1, 2022, to June 30, 2022. 247,918 taxpayers participated in the second tax amnesty, with total assets disclosed at Rp594.82 trillion, of which Rp60.01 trillion was collected in income tax.
"We (the government) have already implemented tax amnesty twice. If it were to be implemented repeatedly, the meaning of the amnesty would be questionable," Purbaya concluded.
This is likely why Purbaya chose to pursue major tax evaders rather than collecting Article 22 Income Tax (PPh) of 0.5 percent for online merchants on e-commerce platforms, which was supposed to take effect on July 14, 2025. The former Head of the LPS chose to pursue tax evaders with a total liability of IDR 60 trillion.
Furthermore, during the October 2025 press conference for the "Realization of the State Budget" (APBN KiTA), Indonesia's tax revenue realization was still far from expectations. As of the end of September 2025, the Ministry of Finance reported that realization was only IDR 1,295.28 trillion, or only 62.4 percent of the annual target. This figure is even lower than the achievement for the same period last year, which was IDR 1,354.86 trillion.
This situation directly impacts the targets set by the government in the 2025-2029 National Medium-Term Development Plan (RPJMN). One of these targets is a tax revenue ratio of 10.24 percent to Gross Domestic Product (GDP) by the end of 2025—and increasing to a range of 11.52-15 percent by the end of his term.
Furthermore, in the first half of 2025, Indonesia's tax ratio stood at 8.42 percent, down from 10.08 percent the previous year. This is due to a 7 percent decline in tax revenue during that period, leaving the Directorate General of Taxes only able to collect IDR 831.27 trillion, or 38 percent of the 2025 State Budget target.
Purbaya stated that his office is ready to pursue 200 major tax evaders whose decisions have become legally binding. This offers the potential for additional state revenue of IDR 60 trillion. The initiative to pursue tax delinquents is one strategy to mitigate the slowdown in tax payments. The Ministry of Finance recorded a 5.1 percent contraction in tax revenues, totaling Rp 1,135.4 trillion as of August 2025.
As of September 2025, 84 of the 200 tax defaulters had made payments totaling Rp 5.1 trillion. Purbaya stated that he would continue pursuing these large tax defaulters to ensure they settle their obligations. Most of these defaulters are corporate taxpayers, while the number of individual taxpayers is relatively small.
Purbaya's efforts to secure additional state revenue from large tax defaulters whose defaults have been finalized have yielded results. Rp 7 trillion has entered the state coffers. "Perhaps almost Rp 7 trillion has been received now. But the payments are being made in installments," he said.
He promised to continue monitoring the speed of these tax defaulters' payments. Discussions with the Director General of Taxes, Bimo Wijayanto, are ongoing, particularly regarding developing strategies to accelerate the payment of these tax defaulters' installments. "I have to discuss the details with the Director General of Taxes first. But I hope most of it will be paid in by the end of the year," Purbaya continued.
Another reason why Finance Minister Purbaya is reluctant to focus on tax collection for the lower-middle class is the waiting period for the impact of the policy of placing Rp 200 trillion in initial budget balance (SAL) funds in state-owned banks (Himbara). The SAL funds were previously held at Bank Indonesia (BI) and then transferred to state-owned banks in the hope of boosting the economy, one of which is through credit distribution. "At least until the policy of placing Rp 200 trillion in government funds in (Himbara) banks begins to show its impact. Then we will consider the online merchant tax later," he added.
This policy of withdrawing funds from BI also represents Purbaya's correction of policies from the Joko Widodo era. Purbaya even admitted to having warned Jokowi that placing Rp 800 trillion in government funds from BI would have a negative impact on both the economy and the banking system.
Political and development observer Agus Wahid stated that Finance Minister Purbaya's initiatives were fundamental and substantive, seeking to address the interests of the people, who had been victims of collusion between officials and oligarchs for the past ten years. He even dared to confront the hegemonic forces of both the government and the oligarchy diametrically opposed.
He assessed Purbaya's political and economic development stance, whose steps and policies were based on valid and accountable data. As Head of the Deposit Insurance Corporation (LPS), Purbaya understands the state's financial flows, particularly between revenue and expenditure items. This includes the financial positioning that is being manipulated, resulting in idle funds (hanging out at Bank Indonesia) or in regional banks.
"A game that results in development programs not running as they should. The people are left to suffer due to unemployment. Economic actors are also left to suffer because it is difficult to obtain capital injections, preventing them from continuing production or microeconomic activities," Agus concluded.
Economic 'Leakage' Is Not Just About Numbers
Based on detailed debt data taken from the Ministry of Finance's APBN KiTa data, President Joko Widodo (Jokowi) and President Susilo Bambang Yudhoyono (SBY) are considered significantly different, even though they have the same Finance Minister, Sri Mulyani. This striking debt comparison demonstrates the vastly different leadership strategies for handling fiscal policy. At the end of SBY's term in 2014, total government debt was recorded at IDR 2,608 trillion, or approximately 24.7 percent of Gross Domestic Product (GDP).
Meanwhile, by the end of Jokowi's term in 2023, the figure had increased to approximately IDR 8,041 trillion, representing a ratio of 38.11% to GDP. This significant difference in figures has become a point of comparison for the public in assessing the effectiveness and direction of the two presidents' economic policies.
Over the 10 years from 2014 to 2023, Indonesia's economic growth averaged only 4.11% per year, or 4.90% per year if we exclude the pandemic year of 2020. In fact, since the reform era of 1998, the Indonesian economy has never reached 7%. Economic growth above 7% was only achieved during the New Order era.
In the 2024 Article IV Consultation, the International Monetary Fund (IMF) predicted that the Indonesian economy would grow at a constant 5.1% between 2025 and 2029. This represents slightly better economic growth than that achieved during Jokowi's administration. Economic growth has struggled to reach 7% due to various classic problems. This is despite Indonesia's vast economic resources, including natural resources, and a large population predominantly of working age.
Purbaya stated that the IMF is not worthy of being a primary reference because its predictions are often wrong and too pessimistic. He gave an example of the IMF's prediction in 2009 which only estimated growth of 2.5%, even though the economic realization reached 4.6%. So, how to achieve economic growth of 8 percent in 5 years as desired by President Prabowo and is the main task of Purbaya. On the other hand, the ICOR (Incremental Capital Output Ratio) figure shows that budget leakage is still high. The late senior economist Faisal Basri once warned about the high ICOR figure in the Jokowi era, especially in the first period, which reached 6.5.
The ICOR figure is a formula developed by Prof. Soemitro to calculate budget leakage. In late 1993, Prof. Soemitro calculated that budget leakage reached 30 percent. This figure was derived from Indonesia's ICOR for that year, which was 5. Meanwhile, the average ICOR for ASEAN countries was only 3.5. The difference between Indonesia's ICOR and the average ASEAN country, divided by Indonesia's ICOR, multiplied by 100 percent, yields 30 percent.
Vice Rector of Resource Management at Paramadina University, Handy Risza, stated that the national economy remains open and can skyrocket to 8 percent. However, Indonesia can no longer rely solely on consumption as its driving force. "Investment is the main source of long-term economic growth," Handy said in a written statement on Monday, November 3.
Handy added that to achieve the 8 percent figure, President Prabowo must encourage annual investment of around IDR 2,705.6 trillion, or a minimum of IDR 13,528 trillion over five years. Furthermore, he emphasized that the lower the ICOR, the more efficient investment in a country. "If you want to grow by 8 percent, the ICOR must be between 3-4," he said.
According to data from the Central Statistics Agency (BPS), Indonesia's ICOR in 2023 was 6.3, while the average ICOR for ASEAN countries was 3.7. Using the same method, the figure was 41 percent. "This means budget leakage has increased from 30 percent to 41 percent. Don't expect investment to flow rapidly into Indonesia if the budget leakage rate is this high," he said.
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