UNAIR NEWS Indonesia檚 Ministry of Finance plans to raise its 2026 tax revenue target to Rp2,357.7 trillion, a 13.5 percent increase from the 2025 target of Rp2,076.9 trillion.
Professor Rossanto Dwi Handoyo, SE, M.Si., Ph.D., from a檚 Faculty of Economics and Business (FEB), cautioned against the risks of this plan. 淚f the revenue target is not met while spending stays on track, the question is: where will the shortfall come from? he said.
Need for caution
He explained that lower-than-expected revenue would leave the government with two options: borrow more or cut spending toward the end of the fiscal year. 淭he problem is, the end of the year is usually when government projects must be completed, he added.
Prof. Handoyo stressed the need for efficient and well-targeted government spending. Programs that directly support citizens攕uch as energy subsidies and welfare initiatives攕hould continue and undergo regular review. Such efforts, he said, are vital for sustaining household consumption, which drives about 60 percent of the national economy.
Yet, he pointed out, the government has recently reduced transfers to regional administrations. As a result, some local governments have raised taxes, including property taxes (PBB) in Pati and Bone. 淗igher property taxes will only add more pressure on household purchasing power, he warned.
Policy priorities
Prof. Handoyo urged the government to identify unproductive spending and redirect funds to more strategic needs. Personnel expenditures, he said, should focus on essential policies that benefit the public. 淭he government must reprioritize, including reviewing the MBG, he noted.
He criticized the large MBG budget, arguing that reallocating part of it to healthcare would help BPJS users and boost public productivity.
According to Prof. Handoyo, policies like MBG often serve as 渓ighthouse projects潝high-profile initiatives that are more symbolic than practical. He argued the government should reassess which sectors deserve priority, rather than focusing solely on campaign promises.
Author: Afifah Alfina
Editor: Yulia Rohmawati
