The government has not ruled out the possibility of introducing a new type of tax in 2027. However, the plan will only be considered if Indonesia’s economic growth shows sustained improvement.
Minister of Finance Purbaya Yudhi Sadewa said the government would first monitor economic developments over the coming periods. One of the key indicators is whether the national economy can sustain growth of 6%.
According to Purbaya, the government will not rush to introduce a new tax simply because economic growth reaches 6% in a single quarter.
Speaking at a press conference on the 2027 Draft State Budget (RAPBN) and Financial Note in Jakarta, Purbaya said the possibility could open up if economic growth reaches 6% by the end of 2026 and records the same or higher growth in the first quarter of 2027.
“If it is only one quarter, it would not be possible yet. But the room for that would become much wider. We will look at the actual condition of people’s purchasing power. For example, if growth reaches 6% at the end of this year and then reaches 6% again, or higher, in the first quarter of 2027, we may introduce a new tax,” Purbaya said.
This means that household purchasing power will be one of the government’s considerations before making a decision. If economic activity strengthens further and people’s capacity is deemed sufficient, the option of introducing an additional tax could be revisited.
The policy is also linked to the government’s efforts to increase state revenue to finance various needs under the 2027 State Budget.
Tax Revenue Targeted at Rp 2,591.4 Trillion
The government has set a tax revenue target of Rp 2,591.4 trillion in the 2027 Draft State Budget. The target is 12.1% higher than the projected tax revenue in the 2026 State Budget, which stands at Rp 2,310.8 trillion.
Taking all sources of revenue into account, state revenue next year is projected to reach Rp 3,426.0 trillion. This represents a 6.8% increase from the 2026 State Budget outlook of Rp 3,208.1 trillion.
To achieve the target, the government has prepared a number of measures to be implemented gradually. Strengthening tax revenue and optimizing revenue from natural resources are among the government’s main priorities.
The government will also make use of legal instruments and fiscal incentives to create a more supportive investment climate. Revenue policies will likewise be adjusted to changes in economic patterns, particularly developments in the digital sector and the international tax system.
Tax Ratio Could Increase
Purbaya is optimistic that tax revenue will continue to improve in line with the recovery and strengthening of economic activity.
Stronger tax revenue growth is also expected to provide room for an increase in the tax ratio in 2027.
“The tax ratio may increase. It may not be 9% as mentioned earlier, but perhaps higher,” Purbaya said.
Under the 2027 Draft State Budget, the government has set a tax revenue target of Rp 2,908.0 trillion. This is a 10.5% year-on-year increase from the 2026 State Budget outlook of Rp 2,631.4 trillion.
With the increase in revenue, Indonesia’s tax ratio in 2027 is projected to reach 10.4%.
The government also sees room to expand the revenue base. One approach is to encourage economic activities currently operating outside the legal sector to enter the formal economy.
Purbaya cited the circulation of illegal cigarettes as one potential source of additional revenue if such activities can be shifted into legal channels.
“If illegal cigarette activity moves into the legal channel, there will be some additional revenue,” he said.
Stronger Economic Growth Could Boost Revenue
In addition to expanding the tax base, the government expects stronger economic growth to automatically increase state revenue.
The greater the level of economic activity, the broader the potential tax base. Therefore, achieving the 2027 economic growth target is an important factor in the government’s fiscal strategy.
“And if economic growth accelerates, we will collect more tax revenue. So, that is what we will work on,” Purbaya said.
The increase in revenue will help the government maintain a balance between state spending needs and fiscal capacity.
2027 Budget Deficit to Remain Below 3 Percent
The government has set the 2027 State Budget deficit at Rp 671.2 trillion, equivalent to 2.4% of GDP.
The figure is lower than the 2026 State Budget deficit of Rp 689.1 trillion, or 2.68% of GDP.
Purbaya stressed that the government would continue to evaluate fiscal conditions over time. If state revenue falls short of expectations, spending efficiency could be one of the measures taken.
Conversely, if revenue performs as projected, the government sees no need for aggressive spending cuts.
“We continuously monitor the condition of our State Budget from month to month. If we need to improve efficiency, we will do so. If circumstances require it, but I don't think they will,” Purbaya said.
He assured that the government would keep the State Budget deficit below the 3% threshold in line with President Prabowo Subianto’s directive.
President Prabowo had previously said that the government was targeting a 2027 State Budget deficit of Rp 671.2 trillion, or 2.4% of GDP.
2027 Economic Growth Targeted at 6%
Indonesia’s economic growth target for 2027 has been set at 6%. The government has also established a number of macroeconomic assumptions as the basis for preparing the Draft State Budget.
Inflation is projected at 2.5%, while the rupiah exchange rate is assumed at Rp 17,500 per US dollar.
The 10-year Government Securities (SBN) yield is projected at around 6.9%.
For the energy sector, the government has set an Indonesian Crude Price (ICP) assumption of US$ 75 per barrel. Oil lifting is targeted at 610,000 barrels per day, while gas lifting is set at 954,000 barrels of oil equivalent per day.
The state revenue-to-GDP ratio is projected at 12.25%. The government has also reaffirmed that the debt ratio will continue to be managed within safe limits.
In addition to macroeconomic indicators, the 2027 Draft State Budget also includes a number of social and welfare targets.
The poverty rate is targeted to decline to 6.0-6.5%. Meanwhile, the Gini ratio is projected at 0.362-0.367, while the open unemployment rate is targeted at 4.30-4.87%.
The government has also set a Human Capital Index target of 0.575 and a Farmer Welfare Index target of 0.8038.
The proportion of formal job creation is targeted at 40.81%. Gross national income (GNI) per capita is projected at US$ 5,800-US$ 5,840.
Meanwhile, the Environmental Quality Index is targeted at 76.84.
State Revenue to Reach Rp 3,426 Trillion
Under the 2027 Draft State Budget, total state revenue is projected to reach Rp 3,426.0 trillion.
The largest component will come from tax revenue, which is targeted at Rp 2,908.0 trillion. The government also expects non-tax state revenue (PNBP) to reach Rp 517.4 trillion, along with grant receipts of Rp 700 billion.
On the expenditure side, the government plans total state spending of Rp 4,097.2 trillion.
The spending will consist of Rp 3,362.2 trillion in central government expenditure and Rp 735.0 trillion in transfers to regions.
With this revenue and expenditure structure, the government projects the 2027 State Budget deficit at Rp 671.2 trillion, or 2.4% of GDP.
Government Faces Global Economic Uncertainty
Amid the relatively high growth target, the government recognizes that Indonesia’s economy will continue to face challenges from the global environment in 2027.
Purbaya said global economic uncertainty remains one of the factors that needs to be anticipated. Nevertheless, the government believes that its experience in dealing with various economic dynamics over the past several quarters provides a foundation for responding to external pressures.
According to Purbaya, the government has demonstrated its ability to formulate policies capable of mitigating the impact of global uncertainty on the domestic economy.
“The government has been able to deliver an adequate policy response that can reduce the impact of global uncertainty on the Indonesian economy,” Purbaya said.
The 2027 Draft State Budget carries the theme “Higher Growth, Faster Prosperity.”
With economic growth targeted at 6%, the government expects stronger economic activity to go hand in hand with increased state revenue.
Against this backdrop, the option of introducing a new tax remains open. However, the final decision will depend largely on economic developments, particularly the consistency of growth and the condition of household purchasing power.
The government will now monitor economic developments through the end of 2026 and into the first quarter of 2027 before determining whether sufficient fiscal space is available to introduce a new tax.
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