Indonesia’s government needs more revenue to fund spending that can boost GDP growth, raise well-being and reduce poverty. The tax-to-GDP ratio is low relative to other emerging market economies. The difficulty is to raise revenues without denting growth or worsening inequality. Successive reforms have modernised the tax administration and increased the number of taxpayers. Nonetheless, raising compliance is an ongoing challenge. Investing in the tax administration, particularly human resources and information systems, rightly remains a government priority. This will help ease compliance costs and strengthen enforcement, raising revenue. There is also scope to improve the design of various taxes. Broadening the bases of income and consumption taxes would raise more revenue and reduce distortions. Expanding property taxation, if appropriately implemented, could provide additional funds for local governments, which have substantial responsibilities in Indonesia’s decentralised system of delivering government services. Taxes can also be used more extensively to discourage activities and behaviours with negative health and environmental externalities. Strengthening property rights and fighting illegal extraction would increase revenues from Indonesia’s natural resource wealth.