2025 State Revenue Target of IDR 2,997 Trillion Will Be Difficult to Achieve

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JAKARTA - Senior Economist of the Institute for Development of Economics and Finance (Indef) Didik J Rachbini said that the target of state revenue in the 2025 State Budget Draft (RAPBN) of IDR 2.997 trillion is difficult to achieve, if national economic growth stagnates below 5 percent.

According to Didik, the macroeconomic conditions in the country are experiencing a fairly severe decline where people's purchasing power has decreased and the middle class is also struggling and even downgraded.

"This target is difficult or even impossible to achieve if the economy grows stagnatingly below or around 5 percent and does not match the campaign promise of the elected president who will grow even higher. There is no need for the campaign promise of 8 percent economic growth," he explained in his statement, quoted on Tuesday, August 20.

Didik explained that state revenue was set at Rp2.997 trillion, mainly sourced from taxes of Rp2.490 trillion. According to the trend of state revenue development in the previous year's RAPBN of IDR 2.802 trillion and also the revenue target in 2024 of IDR 2.309 trillion, according to him, the target for state revenue next year is reasonable because it does not increase rapidly compared to state revenue and tax revenue from the previous year.

"The government itself is currently still pessimistic that the tax revenue target in the 2024 current budget can be achieved. Especially in 2025 where the challenges are much greater. Campaign promises that require large expenditures, while tax revenues cannot be boosted beyond their current capacity," he said.

Didik said that if economic growth could be driven to 6-6.5 percent, then the tax revenue target could be achieved.

Didik explained that macroeconomic growth factors such as investment and trade activities, especially exports, would determine whether the tax revenue target could be achieved or not.

According to Didik, higher economic growth than now could be achieved if there were structural macro policies where investment and exports could be encouraged to be the locomotive.

"Now Indonesia is losing to neighboring countries Vietnam and the Philippines in terms of policies like this," he explained.

In the RAPBN posture, Didik conveyed the Indonesian APBN deficit which continues from year to year and even continues to increase. The planned 2025 RAPBN budget deficit is IDR 616.2 trillion. Like previous years, this deficit is very large and inevitably must be patched with debt.

In addition, Didik said that during the 10 years of Jokowi's administration, the debt policy was indeed reckless so that its legacy would be carried over to Prabowo's administration.

"With so many political promises, it is difficult for the next government to reduce dependence on debt by optimizing state revenues from existing sectors," he said.

According to Didik, the rate of issuance of government bonds will continue to increase and damage the macro climate because interest rates will continue to be pushed up.