Digital Taxation to Meet 2026 Revenue Target and Support Growth

The government has set a 2026 tax revenue target of Rp2.692 trillion, a 12.8% increase over the 2025 outlook, while economic growth is projected at about 5% for the same period. The figure was disclosed in the 2026 Financial Note released in late October 2025.

Tax receipts are driven by three main factors: tax rates, the tax base, and compliance levels. The Laffer Curve (a theory that an optimal tax rate exists between too low and too high) suggests that excessively high rates can reduce compliance. Digitalization is expected to strengthen enforcement, simplify filing, and build taxpayer trust through more accurate data.

By leveraging digital tools, tax authorities can allocate resources more efficiently, expand the formal tax base, and raise compliance without stifling economic activity. This approach aims to meet the revenue target while supporting inclusive growth.