DGT Refunds IDR198.71 Trillion in Tax Overpayments
JAKARTA, DDTCNews - The Directorate General of Taxes (DGT) has disbursed tax refunds, prioritising businesses in labour-intensive industries and export-oriented small and medium enterprises (SMEs).
Director General of Taxes, Bimo Wijayanto, also affirmed that no tax refunds are being deliberately withheld simply to boost state revenue.
"They [tax refunds] have been disbursed. Certainly, labour-intensive industries and export-oriented SMEs are our priority," he said on Friday (9/10/2026).
The DGT recorded realised tax refunds of IDR198.71 trillion through 30 September 2026. This figure comprises income tax refunds of IDR59.08 trillion, VAT and sales tax on luxury goods (STLGs) refunds of IDR137.79 trillion, and other tax refunds of IDR1.84 trillion.
Realised tax refunds declined by 38.08% compared with the same period in 2025, which stood at IDR320.91 trillion.
Bimo noted that refund claims submitted by taxpayers are first reviewed by the tax authority. The audit process is intended to ensure that tax overpayments are genuinely paid to eligible taxpayers that fulfil the applicable requirements.
"There is no [withholding]; as the minister stated, everything is granted in accordance with entitlements. There are standard operating procedures, reviews and regulations in place," he affirmed.
Previously, Minister of Finance, Suahasil Nazara, instructed the DGT to expedite the processing of tax refunds for taxpayers requiring cash flow support, particularly labour-intensive industries and SMEs.
He affirmed that tax refunds are a taxpayer's right. Accordingly, the DGT must process tax refunds as promptly as possible, specifically for business sectors that require liquidity to sustain their operations.
"There is indeed refund management in place, but I have given instructions to the director general of taxes that a tax refund is a taxpayer's right. For industries that genuinely need cash flow, including labour-intensive industries and SMEs, the refunds must be granted as quickly as possible; the rights of these taxpayers must be processed so that payment can be made," said Suahasil.
Regardless of developments in disbursement values, tax refunds must be understood in their proper context as a mechanism for refunding tax overpayments that constitute a taxpayer's right. See: Reversing the Paradigm of Tax Refunds as a State Fiscal Threat.
With respect to VAT in particular, a tax refund is a consequence of the mechanism for crediting input VAT against output VAT in order to preserve VAT neutrality as a tax on consumption. See The Urgency of Redesigning VAT Refund Mechanism in Indonesia
From a tax administration perspective, supervision of tax refunds is necessary to prevent unjustified claims. However, supervision mechanisms must also strike a balance between preventing abuse and fulfilling taxpayer rights, including through a risk-based approach.
A number of publications also emphasise the importance of a swift and accurate tax refund process to safeguard taxpayer cash flow whilst maintaining the quality of tax administration. See How Should the Government Manage VAT Refunds?
Therefore, the design of refund audits must ensure that high-risk claims receive adequate scrutiny without impeding the return of legitimate tax overpayments. See Revisiting Prepaid Tax Scheme as the Root of Tax Refunds (rig)