Finance Minister Purbaya vows to delay any new tax increases until Indonesia’s growth stabilizes above 6 percent.

Indonesia’s Finance Minister Purbaya Yudhi Sadewa has pledged not to introduce any new tax increases until the nation’s economy grows beyond 6 percent. His assurance aims to ease public concern that higher taxes could reduce disposable income and slow recovery momentum.

A Fiscal Promise Tied to Growth

During the “Sarasehan 100 Ekonom Indonesia” forum in Jakarta on October 28, 2025, Minister Purbaya made a clear commitment: no tax hikes will occur unless the economy surpasses 6 percent growth. “I will raise taxes only when the economy grows above 6 percent. People will then be happier to contribute,” he said. The statement reinforces the government’s strategy of maintaining public spending power while focusing on recovery-driven growth.

Prioritizing Stimulus Over Taxation

Rather than relying on tax increases, Purbaya is emphasizing economic stimulation through liquidity injection. One of his major moves has been transferring the State Budget’s Excess Budget Balance (Saldo Anggaran Lebih or SAL) from Bank Indonesia to the Association of State-Owned Banks (Himbara). This shift is designed to push funds into the real sector, driving credit expansion and business activities.

Balancing Fiscal Prudence and Public Confidence

The finance minister stressed that fiscal discipline will be maintained while avoiding policies that could burden households. “I’ll monitor this carefully. You don’t need to worry. If I raise taxes now, it will make things difficult for you,” he said. His stance highlights the government’s preference for growth-led revenue rather than extraction through taxation.

Delayed Increases in Public Contributions

Purbaya also confirmed the postponement of two major policy discussions:

• The appointment of e-commerce platforms to collect Income Tax (PPh) Article 22 from merchants.
• The proposed increase in National Health Insurance (BPJS Kesehatan) premiums.

Both measures will remain on hold until the economy achieves 6 percent growth, signaling a government intent on prioritizing recovery over fiscal tightening.

Strengthening Oversight and Technology Integration

Beyond tax rates, Purbaya aims to improve efficiency and compliance through stronger monitoring systems. He pointed to the dangers of underinvoicing and other tax evasion tactics within customs and excise. To address this, the Ministry of Finance is advancing its Coretax system—a centralized IT platform designed to modernize Indonesia’s tax administration and enhance transparency.

Growth Before Burden

Purbaya’s strategy underscores a pragmatic approach: growth first, adjustment later. He believes that once economic momentum accelerates, tax revenues will naturally increase without the need for higher rates. By leveraging fiscal tools and digital governance, Indonesia aims to build a more resilient economy capable of sustaining inclusive growth across its key sectors.

Purbaya’s commitment to delay tax hikes until Indonesia achieves 6 percent growth sends a strong signal to investors and citizens alike: stability and recovery come first. For Indonesians, this ensures breathing room amid post-pandemic pressures; for regional observers such as Singaporeans, it reaffirms Indonesia’s focus on long-term growth and fiscal credibility in Southeast Asia’s evolving economic landscape.

Sources: Gokepri (2025) , Republika.co.id (2025)

Keywords: Indonesia Economy, Tax Hike, Economic Growth, Fiscal Policy, Disposable Income, Coretax