Indonesian fiscal policy and budget management

Indonesian Finance Minister Purbaya Yudhi Sadewa has outlined several fiscal priorities and policy adjustments throughout mid-2026.

In July, the Minister addressed the funding structure for the Indonesia International Financial Center (PFII), noting that private investor Danantara would provide primary funding while the state budget (APBN) would act as a contingency. He also reported an APBN deficit of Rp 196.5 trillion for the first half of the year and announced plans to issue a yuan-denominated ‘Panda Bond’. Additionally, he discussed cooperation with Nahdlatul Ulama for waste-to-value projects and noted that potential rises in oil prices due to international conflicts could impact fiscal space.

By August, the focus shifted toward budget oversight, regional fiscal stability, and addressing public concerns regarding taxation. The Minister highlighted the allocation of Rp 20.5 trillion in central assistance to hundreds of regencies and cities to control inflation. To protect consumer purchasing power, the government also delayed the implementation of Income Tax (PPh) Article 22 on marketplace transactions from August to October 31, 2026.

Following public concern, Minister Sadewa clarified on August 11 that the government has issued no specific orders to target property rental businesses or owners with new taxes. He described the current taxation of rental income as “business as usual” under existing regulations. The Directorate General of Taxes (DJP) confirmed that no specific work programs for 2027 are planned to target rental property owners, noting that recent discussions regarding the 2027 State Budget Bill (RUU APBN) focused on strengthening the tax base and increasing compliance for existing taxable objects.