Overview

Taxation remains one of the most important sources of state income as it generally makes up the majority of any nation’s annual revenue. For example, in Indonesia in 2022, the revenue generated through taxation amounted to 65.37% (Rp. 1,716 trillion) of total annual state revenue for the year, followed by non-tax state income amounting to 22.4% (Rp. 588 trillion) and a customs-and-excise contribution that amounted to 12.1% (Rp. 318 trillion).[1] Taxation also plays an important role in fostering economic growth and development as the funds that are collected through taxation are essential to financing social services such as healthcare and education, as well as critical infrastructure such as electrical power, roads and various other types of public infrastructure.[2]