Finance Minister Purbaya Yudhi Sadewa announced that the government will delay any tax increase until Indonesia’s economic growth exceeds 6%. He emphasized that the priority is to stimulate growth and strengthen liquidity before introducing new tax measures. The move reflects the government’s cautious fiscal stance and its focus on driving a sustainable recovery supported by both public and private sectors.
During a public address at Menara Bank Mega, Purbaya stated, “So I will monitor that carefully moving forward. You don’t have to worry that I’ll raise taxes and make things difficult for you. I will only raise taxes when the economy grows above 6%. By then, you’ll be happy to pay taxes.”
Purbaya Yudhi Sadewa Explains Cautious Approach to Tax Policy
Purbaya explained that the government aims to strengthen spending efficiency before considering a tax hike. He highlighted that much of the country’s tax revenue remains in government accounts at Bank Indonesia, which limits liquidity in the broader economy. He argued that these funds should instead be directed toward productive spending that benefits businesses and households.
According to Purbaya, prompt spending of collected taxes will help stimulate the private sector and accelerate growth. This strategy, he said, would allow the economy to expand without placing additional pressure on taxpayers. The minister reassured the public that fiscal adjustments will align with economic momentum rather than hinder it.
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Government Fiscal Stimulus Aims to Drive 6% Economic Growth
The government has set an ambitious target of achieving 6% economic growth, which Purbaya believes is attainable based on historical performance. He referenced the growth achieved during the administration of former President Susilo Bambang Yudhoyono, when the private sector played a dominant role in driving the economy.
One of the key differences today, Purbaya noted, lies in the current government’s stronger role in economic activities. During President Joko Widodo’s term, the government has been the main driver, while credit growth has remained modest at around 7%, compared with 22% during Yudhoyono’s period. Purbaya said, “If I can activate the private sector engine this year and beyond, we can reach 6%. Then I’ll also get the government engine running — that’s an additional boost. So it’s not that difficult. And there will be other policies to support it.”
To strengthen the economic recovery, the government has expanded its stimulus programs. These include direct cash assistance, welfare transfers (BLT Kesra), and funding for internship programs. The total package, valued at over IDR 46 trillion, aims to enhance household spending and business confidence toward the end of 2025.
Purbaya added that the government’s clear and optimistic communication helps build public confidence. “Partly yes, [thanks to the stimulus] because the economy is improving and because the government’s message is clear that the future will be better. So people have hope for a better life ahead — that’s what makes them more motivated,” he said.
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Bank Indonesia Forecast Projects 2025 Growth Above 5 Percent
The optimistic outlook is shared by Bank Indonesia (BI) Governor Perry Warjiyo, who projects national economic growth between 4.7% and 5.5% in 2025. He expects stronger performance in the third and fourth quarters compared with the second quarter’s 5.12% year-on-year growth.
Perry explained that the growth momentum will be supported by robust exports and the synergy between fiscal and monetary policies that promote financing for government priority projects. “Bank Indonesia’s projection for economic growth is between 4.7% and 5.5% for the full year 2025. We expect it to be slightly above the midpoint of that range. So you can calculate it yourselves,” he said as reported by Bisnis.com.
Purbaya echoed this confidence, citing a liquidity injection of IDR 200 trillion from government reserves to boost financial flows. He added, “We should be able to reach over 5.5%. It’s important to me because at 5.5%, the President promised a reward.”
Balanced Fiscal Policy Supports Economic Recovery 2025
Indonesia’s fiscal direction under Purbaya Yudhi Sadewa aims to balance growth stimulation with tax prudence. By postponing tax hikes and expanding government spending, the policy seeks to encourage private investment and job creation. This approach reflects a shift toward long-term economic strengthening rather than short-term revenue collection.
The coordinated efforts between the Finance Ministry and Bank Indonesia signal confidence in achieving stable and inclusive growth. As both institutions project steady momentum heading into 2025, Purbaya’s decision to delay the tax increase until the economy surpasses 6% underscores a commitment to recovery first, taxation later — ensuring that Indonesia’s growth remains both strong and sustainable.
Source: ekonomi.bisnis.com
Image: Photo by the Presidential Secretariat Press Bureau
