April 10, 2025 | 08:03 pm
TEMPO.CO, Jakarta - Indonesia's Finance Minister, Sri Mulyani Indrawati, has announced that the State Revenue and Expenditure Budget (APBN) recorded a deficit of Rp104.2 trillion as of March 2025. This figure represents 0.43 percent of the country's Gross Domestic Product (GDP).
During her presentation at an Economic Dialogue event, Minister Sri detailed that the deficit arose from state revenue totaling Rp516.1 trillion, which is 17.2 percent of the targeted Rp3,005.1 trillion, and state expenditure amounting to Rp620.3 trillion, representing 17.1 percent of the planned Rp3,621.3 trillion.
Nevertheless, the former managing director of the World Bank expressed confidence that the state budget position had improved by the end of March. This is because of a positive trend in gross tax revenue, which showed a growth of 9.1 percent in March 2025, compared to the negative 4 percent recorded in February 2025.
Sri clarified that the state budget is structured with a projected deficit of 2.53 percent, in accordance with Law No. 64 of 2024 approved by the Indonesian House of Representatives. "A 2.53 percent deficit translates to Rp616 trillion," she stated in Jakarta on Tuesday, April 8, 2025, as reported by the Presidential Secretariat's YouTube broadcast.
Most of the state revenue is derived from tax collection, amounting to Rp400.1 trillion. This comprises Rp322.6 trillion from general tax revenue and Rp77.5 trillion from customs and excise duties.
Meanwhile, non-tax state revenue reached Rp115.9 trillion. The state expenditure is divided into central government spending, which totaled Rp413.2 trillion, and transfers to regional authorities, amounting to Rp207.1 trillion.
Sri asserted that government spending remains on track, despite the numerous government programs requiring funding. These initiatives include the free nutritious meals, food security, and energy security.
"So, don't worry about the state budget collapsing. Many people ask if the state budget will break down. The answer is no. The President's programs are within the state budget," Sri emphasized.
Four Deregulation Measures
Prior to the same event, Sri also unveiled four deregulation measures in the tax and customs sectors aimed at alleviating the tariff burden experienced by businesses by up to 14 percent. This action was taken following the decision by the Donald Trump administration to impose import tariffs of 32 percent on Indonesian products.
Firstly, the Indonesian government will implement tax and customs administrative reforms to reduce the burden by 2 percent. Through the simplification of these administrative processes, the tariff burden can be lowered to 30 percent.
Secondly, the rate of import Income Tax (PPh) will be reduced from the previous 2.5 percent to just 0.5 percent. This measure is projected to decrease the tariff burden by an additional 2 percent, resulting in a total tariff burden of approximately 28 percent.
Thirdly, adjustments will be made to the import duty rates for products originating from the United States that fall under the most favored nation (MFN) category. The rates, which initially ranged from 5 percent to 10 percent, will be decreased to a range of 0 percent to 5 percent.
Fourthly, the export duty rates for crude palm oil (CPO) commodities will be adjusted, which is expected to reduce the financial burden on businesses by 5 percent.
Therefore, the cumulative reduction in burden from these four measures amounts to 14 percent, bringing the effective tariff burden resulting from the U.S. policy down to 18 percent.
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