Parliamentary Finance Committee Urges Tax Optimisation to Strengthen Fiscal Position
JAKARTA – Parliamentary Finance Commission (Komisi XI) member Eric Hermawan has assessed that the widening 2025 state budget deficit signals the need for strengthened fiscal management going forward. This evaluation is considered important to maintain equilibrium between state revenue and expenditure.
Eric reported that state revenue realisation reached Rp2.756.3 trillion or 91.7 per cent of the target of Rp3.005.1 trillion, whilst state spending remained elevated at Rp3.451.4 trillion. This situation drove the deficit to reach Rp695.1 trillion or approximately 2.92 per cent of GDP, higher than the assumed 2.78 per cent.
“This condition has caused the deficit to widen to Rp695.1 trillion or approximately 2.92 per cent of GDP, approaching the 3 per cent threshold stipulated by law,” said Eric.
Eric explained that optimising tax revenue collection has become key to strengthening fiscal structure. Tax revenue realisation was recorded at Rp2.217.9 trillion or 89.0 per cent of target, meaning there remains room for improvement in strengthening the tax base and compliance.
“Although Non-Tax State Revenue (PNBP) reached 104 per cent of target or Rp534.1 trillion, this surplus is relatively small and unable to cover the significant gap in the tax sector,” said Eric.
On the expenditure side, Eric sees a need to improve the quality of budget allocation to be more effective in driving economic growth. Ministry and institutional expenditure was recorded at Rp1.500.4 trillion or 129.3 per cent of target, whilst non-ministry/institutional expenditure realised Rp1.102.0 trillion or 71.5 per cent.
“This imbalance not only reflects budget control issues, but also has the potential to reduce the effectiveness of spending in driving inclusive economic growth,” said Eric.
Eric also highlighted the primary balance shift from a targeted surplus of Rp63.3 trillion to a deficit of Rp180.7 trillion. According to Eric, this condition serves as a reminder of the importance of maintaining quality financing to remain productive.
“On the other hand, budget financing also increased significantly to Rp744.0 trillion or 120.8 per cent of target, which has implications for rising debt risk and future financing costs,” said Eric.
To this end, Eric advocates measured fiscal consolidation in 2026 with a target state revenue of Rp3.153.6 trillion and a deficit of 2.68 per cent of GDP. This effort needs to be balanced with policies that maintain economic stability whilst protecting society.
“The direction of fiscal policy going forward should emphasise balance between budgetary discipline, macroeconomic stability, and protection for society,” said Eric.