Fitch Ratings warns that Indonesia's plan to create a new state revenue agency could disrupt tax collection efforts.

Fitch Ratings warns that Indonesia's plan to create a new state revenue agency outside the finance ministry under President-elect Prabowo Subianto could disrupt tax collection efforts. The agency's long-term revenue collection benefits are unclear, and removing the tax and customs office from the ministry may lead to operational hiccups and disruptions. Fitch advises removing tax exemptions and raising compliance to boost revenue. Indonesia's state revenue is expected to decline to 14.6% of GDP this year, the lowest among similarly-rated countries.

May 14, 2024
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