Why the Government is Targeting Additional Coal Taxes

The government is preparing adjustments to coal export tax policies to increase state revenues. Coordinating Minister for the Economy Airlangga Hartarto stated that this step is an anticipation to maintain the state budget deficit in the wake of the war in the Middle East.

Airlangga explained that President Prabowo Subianto is also encouraging an increase in coal production volume amid the surge in commodity prices. “Regarding the additional price, coal will also be calculated for export taxes,” said Airlangga at the Presidential Palace Complex, Jakarta, on Thursday, 19 March 2026, as quoted from the Presidential Secretariat’s YouTube.

The production increase is being carried out through adjustments or revisions to the Work Plan and Budget (RKAB). Meanwhile, the major policy adjustment for export taxes is still under study.

Thus, said Airlangga, government revenues are expected to rise with the presence of windfall profits. Windfall profit is a large profit obtained by companies or industries due to sudden external factors beyond productivity increases.

Previously, he had explained that the government could impose tax rate increases when commodity prices surge. “So if from the revenues, when windfall profit occurs, then we can impose a windfall tax,” he said during an iftar with the media at his office earlier in the week.

This policy is implemented to keep the state revenue and expenditure budget (APBN) deficit below 3 percent of gross domestic product. The government has committed not to sacrifice the deficit limit amid the surge in world oil prices that pressures fuel subsidies.

Other steps that will also be taken include accelerating the conversion of diesel power plants (PLTD) to solar power plants (PLTS) for efficiency. The government is also designing a work-from-home (WFH) policy for one day in every five working days for savings.