Bali’s Vehicle Tax Amnesty Boosts Revenue but Risks Long-Term Compliance Decline
A 2026 study published in the International Journal of Contemporary Sciences (IJCS) finds that Bali’s motor vehicle tax amnesty policy, regulated under Governor Regulation No. 40 of 2025, significantly increased regional tax revenue in Karangasem Regency but raised concerns about declining long-term taxpayer compliance. The research was conducted by Gusti Ayu Komang Widiantari, Ni Luh Putu Widyantari, and I Wayan Sutrisna from the Master of Public Administration Program at Mahendradatta University Graduate School. Conducted between January and March 2026, the study highlights how short-term fiscal gains may come at the cost of sustainable tax discipline.
Tax Amnesty as a Strategic Fiscal Tool
Motor vehicle tax is one of the largest contributors to local government revenue in Indonesia, particularly at the provincial level. In Bali, where vehicle ownership continues to grow, this tax plays a crucial role in funding infrastructure and public services.
However, persistent challenges such as low taxpayer awareness, financial constraints, and mounting tax arrears have pushed local governments to adopt tax amnesty programs. These policies typically eliminate penalties and interest for late payments, encouraging taxpayers to settle outstanding obligations.
The Bali Provincial Government introduced the 2025 tax amnesty program as part of a broader effort to strengthen regional fiscal capacity while easing the burden on citizens.
Simple, Field-Based Research Approach
The study used a qualitative case study design focused on the SAMSAT (One-Stop Integrated Administration System) office in Karangasem Regency.
Researchers collected data through:
- Direct observation of tax services
- In-depth interviews with officials and taxpayers
- Analysis of tax revenue reports
Key informants included the Head of the Regional Technical Implementation Unit, SAMSAT officers, and members of the public.
Data was analyzed using an interactive model involving data reduction, presentation, and conclusion drawing, ensuring a comprehensive understanding of policy implementation in real-world conditions.
Key Findings: Revenue Up, Compliance Down
The study reveals a mixed outcome from the tax amnesty policy.
1. Revenue exceeded targets
- Tax revenue realization reached 110.61% of the target
- Significant reduction in accumulated tax arrears
- Increased participation from previously non-compliant taxpayers
2. Strong supporting factors
- Clear legal framework under Governor Regulation No. 40 of 2025
- Effective inter-agency coordination (Bapenda, Police, Jasa Raharja)
- Use of digital communication tools such as WhatsApp Blast
- High public enthusiasm for penalty-free payments
3. Decline in taxpayer compliance
- Compliance rate dropped from 70% in 2024 to 65% in 2025
- Indicates emergence of moral hazard behavior
- Some taxpayers delayed payments, expecting future amnesty programs
4. Uneven policy awareness
- Not all citizens received information about the program
- Some taxpayers reported lack of outreach in their communities
5. Service challenges during peak periods
- Increased queues and workload at SAMSAT offices
- Limited human resources during high-demand periods
Why the Policy Works—But Only Temporarily
The success of the tax amnesty program lies in its ability to remove financial and psychological barriers. By eliminating penalties, the policy makes it easier for taxpayers to fulfill obligations they previously avoided.
However, the study highlights a critical downside: repeated amnesty programs can weaken tax discipline.
According to the researchers from Mahendradatta University, “the policy effectively increases revenue in the short term, but risks creating dependency if not balanced with education and enforcement.”
This pattern suggests that while amnesty programs are effective as a stimulus, they are not a sustainable long-term solution.
Implications for Policy and Governance
The findings carry important implications for policymakers, particularly in regions with similar tax structures.
For local governments:
- Tax amnesty should be used as a temporary policy instrument, not a routine program
- Continuous public education is needed to build long-term compliance
- Enforcement mechanisms must complement incentive-based policies
For public service agencies:
- Improve communication strategies to reach all communities
- Expand digital services to reduce congestion at service counters
- Enhance staff capacity during peak periods
For taxpayers:
- Increased awareness of tax obligations is essential
- Reliance on future amnesty programs may lead to stricter enforcement
Toward Sustainable Tax Compliance
The study emphasizes that sustainable tax systems require more than incentives. A combination of education, enforcement, and service quality is necessary to build a strong compliance culture.
Efforts such as continuous socialization campaigns, improved transparency, and consistent application of penalties can help ensure that tax compliance becomes habitual rather than conditional.
In this context, the tax amnesty policy should be seen as a corrective measure, not a permanent feature of fiscal policy.
Author Profile
- Gusti Ayu Komang Widiantari, M.AP. – Researcher in public administration and fiscal policy, Mahendradatta University Graduate School
- Ni Luh Putu Widyantari, M.AP. – Academic specializing in governance and regional finance, Mahendradatta University
- I Wayan Sutrisna, M.AP. – Lecturer and researcher in public policy and administrative systems, Mahendradatta University
All authors are affiliated with the Master of Public Administration Program at Mahendradatta University, Bali, Indonesia.
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