Luhut: Digital transformation could save Rp1,500 trillion

Jakarta - The Chairman of the Government’s Digital Transformation Acceleration Committee, Luhut Binsar Pandjaitan, has said that government technology (GovTech) transformation could potentially save the state budget by more than Rp1,500 trillion.

“We have reported to the President that we can save more than Rp1,500 trillion. A very large figure. The calculations are there, we have reported them to the President, and this is a truly realistic figure,” Luhut said after attending a meeting on the Acceleration of Social Assistance Digitalisation at the Ministry of Home Affairs headquarters in Jakarta on Tuesday.

According to Luhut, the potential savings are derived from integrating government services, more accurately targeted distribution of social assistance, and improved efficiency in governance.

Currently, data from eight ministries and agencies has been integrated and is being processed using AI. The government is also strengthening data security with support from the National Cyber and Crypto Agency (BSSN).

Luhut said the government is expanding the digital transformation trial to 43 regencies and cities after its initial implementation in Banyuwangi.

“We are not buying or importing software, which would incur high costs. We are simply integrating around 27,000 applications that exist across all ministries and agencies,” he said.

In addition to improving the targeting of social assistance distribution and strengthening corruption prevention, Luhut expressed confidence that the government’s digital transformation will gradually increase Indonesia’s tax ratio from around 9 per cent to between 11 and 13 per cent, bringing it closer to the levels seen in other ASEAN countries.