JakartaPost-Aug 21, 2025
In an attempt to ease discontent over reports of steep property tax hikes in several regions, the government has scrambled to keep regional heads from making policies that place a significant financial burden on residents, especially amid the ongoing national economic slowdown. Exorbitant tax increases have in recent weeks grabbed the public’s attention after a massive protest erupted last week in Pati, Central Java, against Regent Sudewo’s attempt to raise land and building taxes by up to 250 percent in the regency. The unrest has since spread to other regions that have seen similar hikes, with protests erupting in Bone regency in South Sulawesi and calls for demonstrations emerging in Cirebon, West Java, and Jombang, East Java. Amid the public scrutiny, Home Minister Tito Karnavian clarified that only five regional administrations had raised property taxes this year, while reported hikes elsewhere stemmed from policies enacted in previous years. He did not reveal which regions these were. He said that, under the 2022 law on fiscal relations between the central government and regions, regional heads held the authority to raise the taxable value of property, as well as land and building tax rates, thus limiting the central government’s ability to intervene in such policies. But Tito added that he had used his authority as home minister to issue a circular calling on regional heads to proceed with caution. “I have instructed regional heads to adjust the taxable value of property and tax rates in consideration with people’s capacity and local socio-economic realities. They must also ensure proper public communication before enacting such policies,” he told reporters on the sidelines of a Constitution Day event on Monday. “As [the minister] overseeing regional administration, I stressed that if a policy is unsuitable for current conditions, it should be delayed or scrapped,” Tito added. Speculation is rife that budget shortfalls from the central government’s austerity measures prompted a now-scrapped tax hike in Pati, which Presidential Communications Office head Hasan Nasbi has denied. Read more at:
https://www.thejakartapost.com/indonesia/2025/08/21/govt-in-crisis-control-mode-over-tax-hike.html
