Indonesia has demonstrated stronger cost-efficiency in tax collection compared to regional peers like China, India, and the Philippines, as reflected in the declining cost-to-revenue ratio over the past five years, according to the Directorate General of Taxes.

“Our cost of tax collection ratio has consistently improved, which reflects our organizational efficiency,” Bimo Wijayanto, Director General of Taxes at the Ministry of Finance, told a media conference in Jakarta on Monday, July 14, 2025.

Indonesia’s tax collection cost ratio fell from 1.32 percent in 2021 to 0.89 percent in 2025, despite a slight uptick to 1.08 percent in 2024. The primary spending components included employee salaries and benefits, goods and services procurement, and capital expenditures.

As a comparison, China’s ratio ranges between 1.0–1.4 percent; India’s sits at 1.5–1.9 percent; and the Philippines spends 2.0–2.4 percent of tax revenue on collection.

However, Bimo acknowledged that Indonesia still lags behind advanced economies.

“Compared to countries with more mature tax systems like Australia (0.5 percent) and the U.S. (0.4 percent), we still have a way to go,” he noted.

Solid performance

Indonesia’s gross tax revenue averaged Rp181.3 trillion (US$11.1 billion) per month during the first half of 2025, reaching Rp1,087.8 trillion, a 2.3 percent year-on-year increase. This marks a significant jump from previous averages of Rp111.4 trillion/month in 2021 and around Rp170 trillion/month during 2022–2024.

“Thankfully, in 2025 we managed to record Rp181.3 trillion per month in gross revenue during the first semester,” Bimo said.

Tax revenue contributed 69.23 percent to total state revenue as of June 2025, up nearly 1.6 percentage points from the same period last year. Key contributors included:

● Corporate Income Tax (PPh Badan): Rp151.71 trillion;

● Personal Income Tax: Rp14.06 trillion;

● VAT and Luxury Goods Tax (PPN & PPnBM): Rp297.9 trillion;

● Property Tax (PBB): Rp11.56 trillion;

● Net tax revenue: Rp837.79 trillion.

Despite global economic headwinds, Indonesia saw fluctuating monthly growth in tax receipts − peaking in June 2025 with a 15.8 percent year-on-year increase, and bottoming out in January with a 41.9 percent contraction.

Bimo admitted that high restitution claims, particularly from corporate income tax and VAT, put pressure on revenues. Nevertheless, he remained upbeat about the second half of the year.