The Tax System and Sources of Tax Law in Indonesia

Indonesia, a dynamically developing country in the Global South, a leading member of ASEAN, and the world’s largest Muslim country, became a full member of BRICS in 2025. The country’s economic achievements are largely due to its efficient tax system and stable tax legislation.

This article examines the system of tax law sources in Indonesia. It identifies its characteristic features and analyzes its main elements: constitutional provisions, uncodified tax laws, international treaties, and regulations issued by the Ministry of Finance and the Directorate General of Taxes. The state’s tax policy is aimed at both ensuring a favorable investment climate (maintaining the stability of tax legislation, creating free trade zones with preferential tax regimes, etc.) and maintaining acceptable social standards through the implementation of the “gotong royong” ethic of social mutual assistance in tax legislation, which implies exemption from taxation for low-income groups.

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