Indonesia\u2019s Top Business Lobby is Demanding a \u201cFiscal Shield\u201d<\/p>\n
Key Takeaways<\/p>\n
JAKARTA, Investortrust.id \u2014 Indonesia\u2019s business community is\nsounding the alarm. The Indonesian Chamber of Commerce and Industry\n(Kadin Indonesia) is demanding a radical rethink of the nation\u2019s fiscal\nstrategy as global uncertainty\u2014fueled by the U.S.-Israel-Iran\nconflict\u2014threatens to choke domestic growth and corporate liquidity.<\/p>\n
When Kadin speaks, the government listens. As the primary bridge\nbetween the private sector and the state, Kadin\u2019s latest \u201cBusiness\nPulse\u201d survey reveals a dangerous disconnect: while 39.5% of businesses\nbelieve government policy is the key to recovery, their faith in current\nfiscal incentives has evaporated. For global investors, this tension\nhighlights the \u201cshort-term survival vs.\u00a0long-term reform\u201d struggle\ncurrently playing out in Southeast Asia\u2019s largest economy.<\/p>\n
The Fiscal Confidence Gap<\/p>\n
The data is stark. In the fourth quarter of 2025, nearly 20% of\nbusinesses felt government incentives were hitting the mark. By April\n2026, that figure crashed to a mere 5.2%. Kadin Indonesia Institute\u2019s\nDirector of Insights, Fakhrul Fulvian, argues the current toolkit is too\nrigid for a world of surging fuel prices and geopolitical shifts.<\/p>\n
\u201cWhat we mean by \u2018inaccurate\u2019 here is that there must be a more\nadaptive change regarding fiscal incentives,\u201d Fakhrul stated during a\npress conference at Kadin Tower on April 24, 2026. He specifically\npointed to the EV sector as a missed opportunity. \u201cWhy not accelerate\nthe use of electric cars to lower pollution and speed up a sustainable\ngreen economy, especially as fuel prices climb?\u201d<\/p>\n
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Desperately Seeking Cash Flow<\/p>\n
Beyond tax breaks, the business lobby is calling for a \u201ccushion\u201d from\nthe financial sector. Kadin Chairman Anindya Novyan Bakrie emphasized\nthat the immediate priority isn\u2019t just growth, but survival through\nliquidity. He is pushing for banks to offer \u201cTerms of Payment\u201d\nflexibility and credit relief to prevent a cash flow crisis.<\/p>\n
\u201cHow these short-term challenges can be navigated is by providing\nflexibility from the cash flow side. I think that is what is most\nimportant,\u201d Anindya stressed. He argued that allowing businesses to\nmaintain their expansionary stance\u2014particularly in \u201cHilirisasi\u201d\n(downstreaming) projects\u2014is the only way to keep the nation\u2019s economic\nengine running during the current global volatility.<\/p>\n
A Strategic Tax Freeze<\/p>\n
In a move that appears to answer some of Kadin\u2019s concerns, Finance\nMinister Purbaya Yudhi Sadewa confirmed that the government will not\nimplement any \u201cWealth Tax\u201d or new VAT on toll roads in the immediate\nfuture. Purbaya signaled that the Treasury is pivoting away from new\nlevies to focus on aggressive enforcement against corporate tax evaders\nand export \u201cunder-invoicing.\u201d<\/p>\n
\u201cPurchasing power is our main benchmark,\u201d Purbaya noted, confirming\nthat new tax regimes for High Wealth Individuals (HWI) and carbon\ncredits have been pushed back to 2028. For now, the administration\u2019s\npriority is clear: stabilize the foundations of the domestic market\nbefore asking the private sector for more.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesias-top-business-lobby-demands-a-fiscal-shield-1777096256", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }