ASIATODAY.ID, JAKARTA – Indonesia recorded the third-lowest tax-to-GDP ratio among 38 Asia-Pacific economies in 2024, according to the latest data from the Organisation for Economic Co-operation and Development (OECD), underscoring the country’s fiscal challenges as the OECD and the United Nations Development Programme (UNDP) expand a global initiative to help developing nations strengthen tax systems and mobilise domestic revenue.
The OECD Revenue Statistics in Asia and the Pacific 2026 report shows Indonesia’s tax ratio stood at 11.8% of gross domestic product (GDP), ahead of only Bangladesh (6.7%) and Timor-Leste (10.0%). The figure remains well below the Asia-Pacific average of 19.7% and far below the 34.1% average recorded across OECD member countries.
The OECD released the figures alongside the Tax Inspectors Without Borders (TIWB) Annual Report 2026, jointly published with the UNDP, highlighting the growing importance of effective tax administration in financing public services, infrastructure and sustainable economic development.
Since its launch in 2015, TIWB has implemented 165 programmes across 70 developing jurisdictions, helping participating countries generate US$2.72 billion in additional tax revenue and secure US$7.67 billion in tax assessments through hands-on technical assistance.
Rather than providing short-term consultancy, the initiative embeds experienced tax experts within national tax administrations, where they work directly with local officials on complex audits, multinational corporate taxation and tax investigations while building long-term institutional capacity.
OECD Secretary-General Mathias Cormann said stronger domestic resource mobilisation is fundamental to achieving sustainable economic growth.
“Mobilising domestic resources is one of the most powerful ways for countries to achieve their growth and development goals,” said Mathias on July 2, 2026.
Cormann said TIWB has shown that practical peer-to-peer cooperation can strengthen tax systems, build lasting institutional capacity and generate billions of dollars in additional public revenue.
UNDP Administrator Alexander De Croo said effective tax systems enable governments to expand the fiscal space needed to invest in healthcare, education, infrastructure and climate resilience.
“The success of Tax Inspectors Without Borders demonstrates what can be achieved when international expertise, national ownership and long-term partnerships come together to build stronger institutions.”
A key milestone in this year’s report is the launch of the TIWB Graduates Platform, which promotes South-South cooperation by enabling countries that have completed TIWB programmes to provide technical assistance to other developing economies.
Colombia, Egypt, the Maldives and Zambia are now supporting peer administrations, while Botswana became the first country to receive tourism-sector tax expertise from the Maldives, illustrating how knowledge developed in one developing nation can be successfully transferred to another.
The report also introduces TIWB 2.0, an enhanced framework designed to address increasingly complex international tax issues, including digital taxation, multinational corporate audits, criminal tax investigations, automatic exchange of information, country-by-country reporting and illicit financial flows.
For Indonesia, the OECD data also point to structural challenges in tax collection. Taxes on goods and services accounted for 43.1% of total tax revenue in 2024, indicating continued reliance on consumption taxes, while property taxes and social security contributions remain comparatively low.
Several regional peers posted stronger tax performance, including Malaysia (13.0%), Singapore (13.4%), Thailand (17.1%), Vietnam (17.2%), the Philippines (18.1%) and China (19.5%).
According to the OECD, tax revenues across the Asia-Pacific region increased for a fourth consecutive year in 2024, supported by resilient economic activity despite slowing global demand and persistent geopolitical and trade uncertainties.
As Indonesia seeks to finance infrastructure development, accelerate industrial transformation and advance its energy transition, strengthening tax administration and broadening the tax base are expected to remain central to improving long-term fiscal resilience.
The OECD and UNDP said transparent, efficient and accountable tax systems will be increasingly important for developing economies seeking to reduce poverty, improve public services and achieve sustainable economic growth in an increasingly complex global tax environment. (AT Network)
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