2025 VAT Decline Linked to Large Refunds and Weak Industry

The Directorate General of Taxes (DGT) reported domestic Value‑Added Tax (VAT) receipts of 277.63 trillion rupiah through October 2025. This amount represented 19 % of total tax revenue realized in the same period.

VAT collections contracted, with net receipts falling 25.6 % and gross receipts 8.8 % compared with the previous year. The decline was driven by large tax refunds (restitutions) and weaker activity in the large‑machinery trade and oil‑refining sectors. In addition, a payment‑deadline extension until 10 March 2025 reduced early‑year VAT payments.

Overall tax revenue from January to October 2025 reached 1,459.02 trillion rupiah, only 70.2 % of the 2,076‑trillion‑rupiah outlook. The VAT shortfall adds pressure on the government’s fiscal target.