Indonesia’s fiscal performance through October 2025 reflects both resilience and challenges. Tax revenues reached Rp1,459.03 trillion, equivalent to 70.2% of the annual outlook, but fell short compared to the same period last year. Despite weaker tax collection, overall state revenue and expenditure remain on track, with the budget deficit contained at a safe level of 2.02% of GDP.
Key Facts & Background
- Tax revenue (Jan–Oct 2025): Rp1,459.03 trillion
- Equivalent to 70.2% of the annual outlook (Rp2,076.9 trillion)
- Lower than Rp1,517.54 trillion in the same period of 2024
- Growth slowed to 0.7% year-on-year, down from 1.0% in September
- Breakdown of tax performance:
- Corporate income tax (PPh Badan): Rp237.56 trillion, down 9.6%
- Personal income tax (PPh OP & PPh 21): Rp191.66 trillion, down 12.8%
- Final tax, PPh 22 & PPh 26: Rp275.57 trillion, down 0.1%
- VAT & luxury goods tax (PPN & PPnBM): Rp556.61 trillion, down 10.3%
- Total state revenue (Jan–Oct 2025): Rp2,113.3 trillion
- Equivalent to 73.7% of the outlook (Rp2,865.5 trillion)
- Comprised of Rp1,708.3 trillion in tax revenue and Rp402.4 trillion in non-tax revenue (PNBP)
- State expenditure (Jan–Oct 2025): Rp2,593 trillion
- Equivalent to 73.5% of the outlook (Rp3,527.5 trillion)
- Includes Rp1,879.6 trillion in central government spending and Rp713.4 trillion in transfers to regions (TKD)
- Budget deficit (per 31 Oct 2025): Rp497.7 trillion
- Equal to 2.02% of GDP, below the outlook target of 2.78% of GDP
- Considered safe and manageable by the Ministry of Finance
Strategic Insights
The slowdown in Indonesia’s tax revenue growth highlights structural challenges in fiscal mobilization. Declines in corporate and personal income taxes, alongside weaker VAT collection, suggest that business profitability, household income, and consumption levels are under pressure. This trend reflects broader economic headwinds, including global market volatility, commodity price fluctuations, and domestic demand moderation.
Despite weaker tax receipts, the government’s ability to maintain overall revenue growth through non-tax sources (PNBP) demonstrates resilience. Contributions from natural resources, dividends, and service-related revenues have helped offset shortfalls in traditional tax streams, underscoring the importance of diversifying fiscal sources.
On the expenditure side, the government has maintained a balanced pace of spending, with central government programs and regional transfers progressing in line with targets. This disciplined approach ensures that fiscal stimulus continues to support economic activity while avoiding excessive strain on public finances.
The contained budget deficit—at 2.02% of GDP, well below the 2.78% target—is a critical signal of fiscal stability. It reassures investors and credit rating agencies that Indonesia remains committed to prudent fiscal management, even amid revenue challenges. This credibility is vital for sustaining investor confidence, managing borrowing costs, and preserving macroeconomic stability.