Indonesia Needs Substantial Funds for 8% Economic Growth, Prabowo Reveals the Sources!

Jakarta, CNBC Indonesia - President Prabowo Subianto is confident that the government’s fiscal position is now stronger to meet development needs through strategic programmes, enabling the economy to grow by 8%.

This was stated in response to a question from former Finance Minister Chatib Basri, now a member of the National Economic Council (DEN), during the event President Prabowo Answers. The event was broadcast on Prabowo Subianto’s YouTube channel.

“Perhaps the concern is like this, sir, because our tax ratio is low, sir, the tax ratio to GDP is only 9% now, while people see that the financing for this is large, so the question is always where does the financing come from?” said Chatib to Prabowo, quoted on Wednesday (25/3/2026).

“My correction if I’m wrong, sir, you want to take that from the leakages that exist, so tax ratio, plus leakage, then plus efficiency, that’s what will finance the programmes?” he emphasised.

In response to the question, Prabowo initially confirmed Chatib’s statement that he would source funding for his development programmes from closing various budget leakages that have occurred so far, increasing the tax ratio, and improving efficiency.

He said that specifically to prevent leakages and inefficiencies, the government has a digital programme such as govtech. According to DEN, Prabowo stated that govtech not only reduces budget leakages but can also increase Indonesia’s tax ratio.

“And DEN, led by Mr Luhut himself, reported to me that with govtech, with digitalisation, all this can continuously reduce leakages. Then DEN’s own calculation is that our tax ratio can rise by 3.5% in the near term. If that’s true, we’re already on par with other Asian countries,” said Prabowo.

Prabowo emphasised that with the tax growth that has managed to rise by 30% over the last two months, the tax ratio will naturally increase if the trend can be maintained. He is confident that the tax ratio can rise to 12-13% from the previous around 9%.

“If the trend over the next three months rises 30%, 30%, 30%, our tax ratio will be quite good then. So, if we can increase our taxes by a real 30% every month, on average for this year 2026, wow, that means from 9% it will really be 12-13%,” emphasised Prabowo.

Nevertheless, Chatib considered that the 30% tax collection increase over the last two months was only gross. Because net it is only around 7%, as the remaining 23% must be returned in the form of refunds. In response, Prabowo assured that there will be a government strategy to recalculate.

“Yes, but that’s just a strategy, we’ll calculate it later, but we still have a lot of other funds,” emphasised Prabowo.

However, the Ministry of Finance previously revealed that the 30.4% tax growth up to February 2026 is net tax receipts, not gross, so tax receipts reached Rp 245.1 trillion in the first two months of this year.

Deputy Finance Minister Suahasil Nazara said that the high growth in tax receipts at the beginning of this year was supported by the growth of Value Added Tax (VAT) and Luxury Goods Sales Tax (PPnBM) which surged up to 97%.

“VAT and PPnBM are paid when there is a transaction. This shows that in our economy, transactions are ongoing, economic activities, economic activities are running continuously,” said Suahasil, quoted on Friday (13/3/2026).