Indonesian tax investigation into steel companies

Indonesia has launched an investigation into 40 steel companies for potential tax evasion, with estimated losses ranging between Rp4 trillion and Rp5 trillion. The Ministry of Finance identified issues involving fraudulent imports and non-compliance, noting that certain Chinese firms operating in the sector are among those under scrutiny.

By early September, the Indonesian Directorate General of Taxes (DGT) had initiated enforcement actions against 38 of these companies, primarily those involved in steel scrap processing. The companies are undergoing audits, evidence gathering, and case building. Tax Director General Bimo Wijayanto indicated that authorities may utilize the ‘ultimum remedium’ mechanism, allowing companies to settle outstanding obligations and penalties to avoid criminal proceedings and maintain business operations.

As of late August 2026, the DGT reported recovering Rp825.28 billion in tax revenue from these cases. The enforcement process continues through supervision, data deepening, and preliminary evidence examinations. While sufficient evidence may lead to formal criminal investigations, the Ministry of Industry has expressed support for the measures, stating that tax compliance is essential for a healthy business ecosystem and does not inherently damage national industrial competitiveness. Officials noted that compliance remains a key factor for investors assessing the Indonesian business climate.

By September 1, 2026, tax enforcement remained a priority for the government, with authorities continuing to process the 38 steel companies suspected of evasion to potentially recover significant state revenue.