Prabowo’s Bold Plan: Boosting National Revenue by $60 Billion for Growth!

President Prabowo Subianto has introduced a strategic initiative aimed at boosting Indonesia’s national income. This program, unveiled by his younger brother, Hashim Djojohadikusumo, during a recent TV interview, focuses on increasing Indonesia’s tax ratio and closing economic loopholes that have hindered revenue collection for years. But what does this mean for Indonesia’s economy, and how will it be implemented?

Key Objectives of Prabowo’s Program

Hashim Djojohadikusumo outlined that the program’s primary goal is to increase Indonesia’s tax ratio. Initially, the administration aims to raise the tax-to-GDP ratio to 18%, which would align Indonesia with Cambodia’s current level. Once that milestone is achieved, the target will be raised further to 23%.

Indonesia has long struggled with a relatively low tax ratio, affecting the government’s ability to fund public services, infrastructure, and social programs. By increasing the tax ratio, the administration aims to ensure better national financial stability and higher investment in development projects.

The Economic Impact of the Increased Tax Ratio

Raising the tax ratio to 18% is expected to generate an additional US$60 billion (equivalent to around Rp900 trillion) in state revenue. These funds will be strategically allocated toward key development sectors, including:

1. Infrastructure Development – Expanding roads, bridges, and public transportation systems to boost connectivity and economic activity.
2. Social Welfare Programs – Improving education, healthcare, and poverty alleviation efforts to enhance the standard of living.
3. Investment in Industry and Innovation – Supporting local businesses and startups to drive economic growth and job creation.

By increasing revenue collection, the government can reduce reliance on external debt while improving domestic economic resilience.

Targeting the Grey Economy

One of the major components of this program is tackling Indonesia’s “grey economy,” which refers to unregulated and informal economic activities. According to Hashim, this sector accounts for approximately 25-30% of Indonesia’s GDP. Addressing this issue is critical because informal transactions often go untaxed, leading to significant revenue losses for the government.

Strategies to regulate and integrate the grey economy include:

• Strengthening digital payment systems to track transactions.
• Encouraging small businesses to register and comply with tax regulations.
• Implementing stricter enforcement against tax evasion and fraud.

By formalizing a larger portion of the economy, the government can increase tax compliance and broaden the national revenue base.

Who Will Lead the Program?

To ensure the success of this initiative, President Prabowo has entrusted Anggito Abimanyu, the Deputy Minister of Finance, to spearhead the program. Anggito is well-regarded for his expertise in economic policy and fiscal management. His leadership is expected to bring about effective implementation strategies, policy enforcement, and stakeholder engagement to optimize tax revenue collection.

The Inspiration Behind the Program

Hashim revealed that the idea for this program was inspired by Prabowo’s father, Soemitro Djojohadikusumo, an influential economist who served as a minister in both President Soekarno’s and President Soeharto’s administrations. Soemitro had long recognized that Indonesia was losing nearly 30% of its potential revenue due to inefficiencies and tax evasion.

This knowledge fueled Prabowo’s determination to address the issue and create a comprehensive solution to plug the country’s financial leakages. By implementing this program, the administration seeks to honor Soemitro’s vision and strengthen Indonesia’s economic framework.

Challenges and Potential Risks

While the program has promising prospects, it also faces several challenges, including:

1. Public Resistance – Increasing the tax burden, especially on businesses and high-income earners, may be met with opposition.
2. Implementation Hurdles – Enforcing compliance in the grey economy requires extensive monitoring and cooperation from multiple agencies.
3. Corruption and Bureaucracy – Ensuring transparency in revenue collection and fund allocation is critical to maintaining public trust.

To mitigate these risks, the government must adopt a well-structured approach, incorporating clear policies, strong oversight mechanisms, and public awareness campaigns to ensure smooth execution.

Conclusion: A Bold Step Toward Economic Strengthening

Prabowo’s National Income Improvement Program represents a bold initiative to strengthen Indonesia’s economy by enhancing tax revenue collection and formalizing the grey economy. If successfully implemented, the program has the potential to generate substantial state income, fueling national development and improving the quality of life for Indonesians.

With the right leadership, strategic enforcement, and public cooperation, this initiative could mark a turning point for Indonesia’s economic future. The coming years will determine whether this ambitious plan will translate into tangible improvements or face obstacles that hinder its success.