2027 Tax Policy Focus: Refund Reform to Windfall Tax

JAKARTA, DDTCNews - The Ministry of National Development Planning (Perencanaan Pembangunan Nasional/PPN in Indonesian)/National Development Planning Agency (Badan Perencanaan Pembangunan Nasional/Bappenas in Indonesian), in its Draft Initial Government Work Plan (Rencana Kerja Pemerintah/RKP in Indonesian) 2027, has also set out seven tax policy focuses for next year.

Bappenas stated that broadening and deepening activities would be implemented to optimise tax revenue. Nonetheless, the optimisation of tax revenue would also continue to take into account the investment climate and business sustainability.

"These efforts are pursued through the modernisation of tax administration...," reads the Draft Initial RKP 2027, quoted on Saturday (9/5/2026).

The document states that the broadening and deepening of tax revenue would be pursued primarily through administrative reform to prevent leakage and capture the potential from rising economic growth into tax revenue on an optimal basis. The broadening and deepening efforts would be focused on 7 policies.

First, expanding the tax base through the formalisation of economic activity, including informal workers. Second, strengthening the coretax service based on data analytics to improve voluntary compliance by taxpayers, both in reporting and payment.

Third, information technology-based supervision and joint programmes among agencies to reduce underreporting. Fourth, optimising revenue from new and priority sectors, including the digital economy, downstream natural resource processing and economic activities under government priority programmes.

Fifth, refining tax incentives that are better targeted and measurable to drive investment, priority sectors and economic value added. Sixth, improving the management of tax refunds.

Seventh, implementing a windfall tax scheme in a measured and targeted manner for businesses that enjoy significant gains from rising commodity prices.

In the Draft Initial RKP 2027, Bappenas targets tax revenue in 2027 to range between 10.02% and 10.50% of gross domestic product (GDP). The tax ratio target is not significantly different from this year's target of 10.48%. (dik)