Indonesia's new tax reform: Potential and direction

Mohamad Ikhsan, Ledi Trialdi, Syarif Syahrial

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)


This study aims to provide direction for policy and provide input to improve the quality of taxation services, by emphasizing and analyzing the existing tax potential and recommending a taxation reformation plan in accordance with fiscal sustainability and efforts to increase the level of Indonesian competence both for the transition period and in the long term. The result of the study has indicated that there is still the opportunity to increase national revenue without increasing rates and by increasing the capacity of tax administration and expanding the tax base, tax collection/revenue will increase. There are a number of indicators that illustrate this, such as the ratio of tax revenue to the GDP which is still relatively low compared to other countries, wide scope for increasing value added tax (VAT), PIT and CIT revenue productivity, etc. Our best estimation for potential tax revenue expansion for the next 2-3 years would be 2.1% of GDP where PIT and CIT contributed more than half of that expansion.

Original languageEnglish
Pages (from-to)1029-1046
Number of pages18
JournalJournal of Asian Economics
Issue number6
Publication statusPublished - Dec 2005


  • Tax base
  • Tax potential
  • VAT


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