Indonesia Finance Minister Pledges Tax Refunds for Eligible Businesses

Indonesia’s new Finance Minister, Suahasil Nazara, has pledged that businesses and other taxpayers entitled to tax refunds will receive the money owed to them under existing regulations.

The commitment comes after delays in processing some refunds, with businesses and lawmakers raising concerns that prolonged waits can put pressure on corporate cash flow.

Nazara said on Friday, September 18, that the Directorate General of Taxes would continue processing refunds according to applicable tax rules and procedures. He also instructed tax officials to improve the management and communication of the refund process.

The announcement is one of the first major signals from Nazara since he became Indonesia’s finance minister earlier this week.

What Nazara said about tax refunds

Nazara said taxpayers who have a legitimate right to a refund should receive it.

The minister made the statement during the September edition of the government’s APBN KiTa budget briefing in Jakarta.

According to Indonesia’s ANTARA news agency, Nazara said the Directorate General of Taxes was already processing refunds in accordance with existing tax mechanisms and regulations. He also said he had instructed Director General of Taxes Bimo Wijayanto to manage the refund process and improve communication around how refunds are handled.

The pledge does not mean every refund claim will be paid immediately.

Tax authorities still have to establish that a taxpayer has overpaid and meets the legal requirements for receiving the money.

Why some tax refunds have been delayed

The refund issue became more prominent under Nazara’s predecessor, Purbaya Yudhi Sadewa.

Reuters reported that Purbaya had increased scrutiny and audit requests involving tax refunds. The additional checks contributed to delays in processing some claims.

Indonesia’s tax authority has said that refunds must follow established standard operating procedures.

Director General of Taxes Bimo Wijayanto said earlier in September that refunds were being handled selectively and with greater measurement and planning, with some taxpayers subject to audits before payments could be released.

That means the government’s position involves two objectives: paying legitimate claims while maintaining controls against improper or unsupported refunds.

Businesses say delays can affect cash flow

Delayed refunds can matter significantly for businesses because tax overpayments represent money that companies have already paid to the government but may be entitled to recover.

Indonesia’s business community has raised concerns that delays can restrict corporate liquidity.

The Indonesian Employers Association, known as APINDO, has called for greater certainty in tax policy following Nazara’s appointment.

Earlier reporting by Indonesia’s tax-policy publication DDTC also cited complaints from business groups about difficulties in receiving refunds. The concerns included possible effects on company cash flow and the ability of businesses to finance projects.

For companies operating with tight working-capital requirements, the timing of a legitimate tax refund can therefore have practical financial consequences.

The tax authority will still conduct audits

Nazara’s pledge does not remove the tax authority’s verification process.

Bimo Wijayanto said the Directorate General of Taxes cannot release certain refunds without following the required audit procedures.

He described the system as selective and targeted, with taxpayers that require further examination remaining subject to the relevant checks.

This distinction is important.

A tax refund is not simply a payment made whenever a company submits a request. The tax authority must establish that the taxpayer meets the conditions under Indonesian law.

The government therefore appears to be seeking faster handling of valid claims without abandoning the controls used to verify them.

Tax revenue has been rising

The refund debate comes as Indonesia reports strong growth in tax collections.

Nazara said tax revenue reached Rp1,409 trillion by August 31, 2026, representing 59.8% of the year’s APBN target of Rp2,357.7 trillion.

Revenue was 24.1% higher than in the same period a year earlier.

Value-added tax and luxury-goods sales tax generated Rp591.5 trillion, up 38.9% year on year.

Non-oil-and-gas income tax reached Rp722.2 trillion, an increase of 16.6%, while oil-and-gas income tax reached Rp39 trillion, up 63.8%.

The figures give the government a stronger revenue position than a year earlier, although refunds still affect the amount of money ultimately retained by the state.

Refunds and government revenue are connected

When the government collects more tax, it does not necessarily mean all of that money represents permanent government revenue.

Taxpayers may have paid more than they ultimately owe and become entitled to refunds after reconciliation or assessment.

For the government, refunds therefore form part of normal tax administration rather than being an optional payment to businesses.

Nazara’s statement places the issue within that framework. The government wants to protect revenue while also respecting taxpayers’ legal rights.

New minister faces broader fiscal challenges

The tax-refund issue is one part of a much larger fiscal agenda for Nazara.

President Prabowo Subianto appointed Nazara as finance minister on September 14, replacing Purbaya Yudhi Sadewa. The Indonesian government said the appointment was made through Presidential Decree No. 97/P of 2026.

Nazara has subsequently emphasized continuity in fiscal policy.

Reuters reported that he intends to maintain Indonesia’s 2026 budget-deficit target at 2.85% of GDP, below the country’s statutory 3% ceiling.

He is therefore taking over at a time when the government is trying to balance spending priorities, revenue collection, liquidity management and investor confidence.

Tax refunds are not the same as tax cuts

The distinction between a refund and a tax cut is important.

A tax cut changes the amount of tax a taxpayer is legally required to pay.

A refund, by contrast, returns money that the taxpayer has already paid but is determined to have overpaid or otherwise become entitled to recover under the applicable rules.

Nazara’s announcement does not introduce a new tax-rate reduction.

Instead, it concerns the administration of existing refund rights.

Government seeks better communication

Nazara has also emphasized communication around the refund process.

He instructed the tax director general to address refund management, including how the government communicates with taxpayers about the process.

That could become significant for businesses waiting for refunds because delays can be difficult to manage when taxpayers do not know whether their claims are being processed, audited or held for additional documentation.

Clearer communication could help businesses distinguish between an ordinary processing delay and a case requiring further tax examination.

What happens next?

The immediate issue is whether the government’s commitment translates into faster processing for eligible taxpayers.

The Directorate General of Taxes is expected to continue applying its existing verification and audit procedures while releasing refunds that meet the requirements.

The tax authority’s earlier position indicates that some cases will continue to require examination before payment.

For businesses, the practical test will therefore be the speed and predictability of the refund process rather than the announcement alone.

For the Indonesian government, the challenge is to maintain tax compliance and protect public revenue while ensuring that legitimate taxpayer claims are not unnecessarily delayed.

Nazara’s pledge establishes the policy direction, but the implementation of that direction will depend on how individual refund cases are assessed and processed in the months ahead.