Jakarta (VNA) – The Indonesian government is investigating a number of foreign-invested companies operating in the country on suspicion of tax evasion, causing significant losses to the state budget.
Speaking to reporters at the Ministry of Finance headquarters, Indonesian Finance Minister Purbaya Yudhi Sadewa said the companies under investigation mainly operate in the steel and construction materials sectors. Many of them, he said, sold products directly to clients on a cash basis without properly reporting transactions or paying value-added tax (VAT).
The minister warned that such practices have inflicted substantial losses to the state buget revenue. In the steel sector alone, based on information from a whistleblower who has since come forward, the losses could exceed 4 trillion IDR (about 260 million USD) a year.
Beyond tax evasion, Indonesia’s Ministry of Finance has also detected widespread under-invoicing in customs and excise. Some exporting companies are suspected of declaring the value of goods at only about half of their actual value in order to reduce tax liabilities and related fees.
In response, the government plans to overhaul the performance and organisational structure of both the Directorate General of Taxes and the Directorate General of Customs and Excise. Purbaya said firm measures would be taken against officials or units that fail to improve.
Earlier, the Finance Ministry issued Regulation No. 117 of 2025 on restructuring the Directorate General of Taxes. Under the regulation, the reorganisation must be completed by December 31, 2026, with the aim of ensuring the stability of the core tax administration system and meeting the needs of stakeholders.
These latest moves signal a tougher stance by the Indonesian Ministry of Finance on tax compliance and customs administration, particularly for foreign-invested businesses.
Indonesian officials stressed that stronger oversight, institutional reform and greater enforcement accountability are essential to protecting state revenue while ensuring a fair and transparent business environment./.
