Prabowo to Establish National Revenue Agency: Signs and Implications

President Prabowo Subianto remains committed to establishing the National Revenue Agency, a promise he made during his 2024 presidential campaign. This commitment has now been formalized through Presidential Regulation No. 12 of 2025 on the National Medium-Term Development Plan (RPJMN) for 2025-2029.

The RPJMN serves as a detailed plan outlining the vision, mission, and programs of Prabowo and Vice President Gibran for the 2024-2029 period. The formation of the National Revenue Agency is one of the major strategies embedded within this framework.

Where Is the Plan for the National Revenue Agency Stipulated?

• The plan for the establishment of the National Revenue Agency is specifically mentioned in Annex I of Presidential Regulation No. 12 of 2025.
• The formation of this agency is part of the seventh national priority, which aims to enhance state revenue management.

Why Is Prabowo Forming the National Revenue Agency When There Is Already a Tax Directorate?

• According to Presidential Regulation No. 12 of 2025, Prabowo aims to increase the country’s revenue ratio to 23% of GDP.
• The agency is expected to streamline and improve the efficiency of revenue collection, ensuring that Indonesia can maximize its fiscal capacity to support national development.

What Are the Responsibilities of the National Revenue Agency?

Based on the infographic presented in the Presidential Regulation, the National Revenue Agency will have several key responsibilities:

1. Extending and Intensifying Tax Revenue Collection
   • This involves broadening the taxpayer base and ensuring that more individuals and businesses contribute to state revenues.
   • Enhancing tax enforcement and compliance to prevent tax evasion.
2. Enhancing Non-Tax State Revenue Collection
   • Increasing revenues from sources outside taxation, such as natural resource management, state-owned assets, and other state income sources.
   • Strengthening mechanisms to ensure efficient collection and use of non-tax revenues.

What Are the Targets for Tax Revenue Intensification and Extension?

To achieve the goals of the National Revenue Agency, Prabowo has outlined specific targets:

• Expanding the taxpayer base through extensive registration and compliance efforts.
• Achieving a 100% compliance rate for tax reporting (SPT) by 2029.
• Reaching a tax revenue effectiveness index of 100% by 2029.

These targets indicate that the government will place significant emphasis on improving tax compliance and collection efficiency. This could include stricter enforcement measures and enhanced digital tax administration systems.

What Are the Targets for Non-Tax State Revenue Intensification?

In addition to tax revenue, Prabowo also aims to optimize the country’s non-tax state revenue (PNBP). The goal is to achieve a 90-100% realization rate for non-tax revenue by 2029. To reach this, the government plans to implement several measures:

1. Reforming the Governance of Oil and Gas Natural Resource Revenues
   • Enhancing transparency and efficiency in oil and gas sector revenue collection.
   • Implementing better monitoring systems to ensure accurate reporting and fair revenue distribution.
2. Improving the Management of Non-Oil and Gas Natural Resource Revenues
   • Establishing better regulatory frameworks for sectors such as mining, forestry, and fisheries.
   • Encouraging sustainable resource extraction to maximize long-term revenue generation.
3. Enhancing Asset Management Governance
   • Optimizing the utilization of state-owned assets to generate revenue.
   • Streamlining bureaucratic processes to make asset-related transactions more efficient.

Was There a Plan to Cancel the Formation of the National Revenue Agency?

• There were speculations that Prabowo might cancel the plan to establish the National Revenue Agency.
• This speculation arose from statements made by Anggawira, the Chairman of the National Young Entrepreneurs Volunteer Group (REPNAS), who is a supporter of Prabowo.
• Anggawira mentioned that merging the functions of taxation, customs, and non-tax revenue collection under one agency is highly complex and would require a significant amount of time.

Despite these concerns, Prabowo has moved forward with the plan, as evidenced by its inclusion in the 2025-2029 RPJMN. This suggests that the government is determined to restructure revenue collection systems to improve efficiency and effectiveness.

What Are the Potential Benefits of the National Revenue Agency?

The establishment of the National Revenue Agency could bring several advantages:

1. Improved Revenue Collection Efficiency
   • A centralized agency could enhance coordination between different revenue collection departments.
   • Digital transformation and automation could reduce inefficiencies and bureaucratic hurdles.
2. Enhanced Compliance and Reduced Tax Evasion
   • With stronger enforcement mechanisms, the agency could minimize tax evasion.
   • Increased transparency in revenue collection would strengthen public trust.
3. Better Utilization of State-Owned Resources
   • Optimizing non-tax revenue sources could provide additional funding for public services and infrastructure projects.
   • Efficient management of state-owned enterprises and assets could unlock new revenue streams.

Challenges and Concerns Surrounding the Agency’s Formation

While the plan sounds promising, there are several challenges that need to be addressed:

• Implementation Complexity: Integrating different revenue collection functions under one agency requires extensive planning and coordination.
• Potential Bureaucratic Resistance: Existing institutions such as the Directorate General of Taxes and the Directorate General of Customs and Excise might resist merging due to concerns over organizational restructuring.
• Legal and Regulatory Hurdles: Adjustments to existing laws and regulations might be necessary to allow the agency to function effectively.
• Public Perception and Acceptance: The government needs to ensure that taxpayers and businesses understand and support the transition.

Conclusion

The establishment of the National Revenue Agency under Prabowo’s administration marks a significant step toward improving Indonesia’s fiscal capacity. By streamlining tax and non-tax revenue collection, the agency aims to increase the country’s revenue ratio to 23% of GDP, ensuring sustainable economic growth.

While challenges remain, the government’s commitment to including this initiative in the RPJMN suggests that Prabowo is serious about enhancing Indonesia’s revenue management. Whether this plan succeeds will depend on effective implementation, strong leadership, and continuous improvements in governance and transparency.