CELIOS published the report “Jokowi’s Fiscal Legacy: Notes for Future Government” in February 2023 to assess Indonesia’s fiscal condition over President Joko Widodo’s two terms and the implications of fiscal reform for the future economy. The report highlights several key issues: the tax ratio has declined since 2015, tax incentives such as Tax Holidays could reduce state revenue, external debt rose by 44% from 2014–2021, and more of the budget has been allocated to debt repayment than to productive investment. Infrastructure megaprojects led by state-owned enterprises are also seen as potentially placing a burden on the state budget in the future.
The report emphasizes the importance of fiscal justice policies, including a progressive tax system to increase public revenue and ensure its fair distribution in order to address inequality and poverty.
Key recommendations include redesigning the state budget to improve the quality of public spending—reducing spending on goods and personnel while strengthening health and social protection spending—as well as taking concrete steps to balance debt and strengthen the primary balance.
CELIOS published the report “Jokowi's Fiscal Legacy: Notes for Future Government” in February 2023 to assess Indonesia’s fiscal condition over President Joko Widodo’s two terms and the implications of fiscal reforms for the country’s future economy. The report highlights key issues: tax ratios have declined since 2015, tax incentives such as Tax Holidays risk reducing state revenue, external debt rose 44% from 2014-2021, and budget allocations have prioritized debt repayment over productive investment. State-owned enterprise–based infrastructure megaprojects are also seen as potentially straining the state budget in the future.
The report emphasizes the importance of fiscal justice policies, including a progressive tax system to generate adequate public revenue and distribute it fairly to address inequality and poverty.
Key recommendations include redesigning the state budget to improve spending quality—reducing goods and personnel expenditures while strengthening health and social protection spending—and taking concrete steps to achieve debt sustainability and strengthen the primary balance.