Prabowo to Reform Customs, References the Dissolution of the Soeharto Era

Jakarta, CNBC Indonesia — President Prabowo Subianto has pledged to fix government agencies so they no longer cause losses to state revenue, including the Directorate General of Customs and Excise (DGCE) of the Ministry of Finance. ‘Customs must be repaired,’ Prabowo said as he delivered the Macroeconomic Framework and Chief Policy for Fiscal Policy (KEMPPKF) 2027 to the Parliament in Jakarta on Wednesday, 20 May 2026. He even recalled earlier actions during the Soeharto era. In 1983, while serving as Coordinating Minister for Economic Affairs, Ali Wardhana proposed to President Soeharto to abolish Bea dan Cukai. The President agreed and implemented it two years later. The role of Bea dan Cukai was replaced by Société Générale de Surveillance (SGS) from Switzerland. During the abolition, the major issues immediately disappeared. Export–import procedures became easier, logistics costs fell, and revenue from the customs and excise sector surged. After the problems disappeared, Customs and Excise was reactivated in the 2000s. ‘At that time state revenue rose, isn’t that sad,’ he added. The issue now highlighted by Prabowo is under-invoicing—a practice whereby prices are declared below the transaction value. This can lead to losses for state revenue because the lower prices mean importers do not pay duties and taxes properly. ‘We have calculated, we know that the difference between what is reported and what is not reported often reaches 50%,’ Prabowo said. He emphasised that this must be addressed. ‘This is our struggle; I do not want to demoralise anyone. It is time for us to be honest,’ he concluded.