Indonesia must pursue a progressive value-added tax system

Indonesia faces the challenge of increasing tax revenue while ensuring social equity. A potential solution is a modernised value-added tax system that maintains a uniform rate across all goods and services while implementing real-time digital compensation for low-income households. By leveraging the Core Tax Administration System and existing digital payment infrastructure, this reform could generate billions in revenue for public services while protecting vulnerable populations. The timing is ideal, as Indonesia's growing digital adoption and tax modernisation efforts create perfect conditions for implementation.