Government Eyes Four Spending Areas in Rp4,097 Trillion 2027 Budget

The Indonesian government has confirmed that state spending efficiency will continue, despite a 3.9% increase in its budget plan compared with the outlook for realised state spending in 2026. In the 2027 Draft State Budget (RAPBN), the government’s spending plan reaches Rp4,097.2 trillion.

According to the government, spending efficiency will be carried out while ensuring that the priority needs of the public and the administration of government can still be met.

“This is where we continue to work on efficiency while also maintaining priorities,” said Deputy Finance Minister (Wamenkeu) Suahasil Nazara during the UBS Indonesia Macro Tour, as quoted from his statement on Tuesday (1/9/2027).

The spending areas under scrutiny include social protection, government operations, personnel expenditure, and transfers to regions.

The government has also ensured that the policy on transfers to regions takes into account the ability of regional governments to adjust spending in order to support the effectiveness of development implementation in the regions.

Through this management, the government is targeting a 2027 state budget deficit of 2.4% of gross domestic product (GDP).

According to Suahasil, controlling the deficit is part of the government’s efforts to maintain fiscal health while improving the quality of the state budget.

“This is a figure that we have designed in order to improve the quality of the budget,” said Suahasil.

In addition to maintaining spending efficiency, the government continues to encourage economic growth as a foundation for strengthening state revenue. In the 2027 RAPBN, economic growth is targeted to reach 6%.

This growth is expected to come from a number of components, including public consumption projected to grow by around 5.4%, government consumption by 5.6%, investment by at least 7%, and exports by 7.5%.

“The challenge is how economic growth can generate state revenue,” said Suahasil.

To support this, the government continues to strengthen tax administration through the use of technology. The implementation of Coretax is one part of efforts to improve the quality of tax administration and compliance.

According to the Deputy Finance Minister, improvements in tax administration through Coretax have contributed to increased tax revenue. The full implementation of Coretax in 2026 is also expected to continue to improve in the following year, particularly in increasing taxpayer compliance.

“Coretax will continue to be improved, especially in terms of compliance,” he said.

In addition to improving compliance, the government also sees the importance of broadening the tax base. The development of the mineral sector and industrial downstreaming is one area considered to have the potential to broaden Indonesia’s economic and tax base.

“We believe that downstreaming of mineral extraction and downstreaming of the mining industry are key to broadening the tax base in the future,” said the Deputy Finance Minister.

The total state revenue target in the 2027 RAPBN is Rp3,426 trillion, up 6.8% compared with the 2026 state budget target. This consists of tax revenue projected to grow by 12.1% compared with the 2026 outlook, with a value of Rp2,908 trillion.

Non-tax state revenue (PNBP) is set at Rp517.4 trillion, and grant revenue at Rp0.7 trillion.

“This is good tax growth by Indonesian standards. With economic growth of 6% and inflation of 3%, nominal GDP growth is around 9%, and tax revenue is expected to grow higher than that,” said the Deputy Finance Minister.