Interior Minister Pushes Digital Tax to Close Revenue Gaps

On 31 October 2025, Indonesia’s Interior Minister Muhammad Tito Karnavian highlighted the need to digitalize regional tax collection to plug revenue leaks. He made the remarks in Jakarta during a Ministry of Home Affairs press briefing.

The minister noted that hotels, restaurants and parking operators already remit taxes, but manual reporting and remittance create gaps between taxes paid and amounts received by local governments. Digital systems would route payments directly to regional accounts, eliminating intermediaries and reducing opportunities for misreporting.

The initiative is expected to boost Regional Original Revenue (PAD) without imposing new taxes on low‑income households. Transparent fund flows should enable local authorities to allocate resources more efficiently for public services.