Prabowo: Export Fraud is the Reason for Low Salaries for Teachers and Civil Servants

President Prabowo Subianto has revealed the factors contributing to the low salaries of teachers, law enforcement officers, and civil servants (ASN) in Indonesia. Prabowo shared his views during a speech at the plenary session of the House of Representatives (DPR) on Wednesday, 20 May 2026.

One of these factors, Prabowo stated, is the practice of fraud in foreign trade. “This is what causes the salaries of teachers to be small, the salaries of law enforcement officers to be small, and the salaries of civil servants to be small. This is why the budget is never sufficient, the budget is not strong, and so on,” he said at the MPR/DPR/DPD Building, Jakarta.

According to Prabowo, Indonesia does not actually lose in exports and imports. “Our exports are always greater than our imports,” said the Chairman of the Gerindra Party.

However, he noted that not all profits from exports are recorded in state revenue. Prabowo highlighted practices such as under-inting, under-accounting, transfer pricing, and smuggling as loopholes that prevent optimal state revenue from exports.

Prabowo stated that these fraudulent practices have been occurring for 34 years. “During these 34 years, what has happened? What has happened is what is called under-invoicing. Under-invoicing is actually fraud,” he explained.

Under-invoicing is the practice of reporting export values below their actual price. This method is frequently used to avoid taxes, facilitate smuggling, and conduct money laundering. According to him, this practice occurs across various commodities, including palm oil.

He noted that several entrepreneurs do not report their true export volumes. He stated they engage in cheating by utilising their own overseas companies. “They sell from their domestic company to their overseas company at a price far below the actual value,” he said.

In his speech, the former Minister of Defence claimed that under-invoicing practices have cost the state US$ 908 billion over the last 34 years. The data he presented was sourced from UN Comtrade 2025 and processed by the NEXT Indonesia Institute.

Consequently, Prabowo asserted that the state must be brave enough to overhaul the entire oversight system, particularly in the customs sector. “We must be brave enough to speak the truth; we must improve our government institutions,” he said.