Jakarta, hitclubapk3 Indonesia
—
Indonesian Employers Association (
Apindo
) revealed funding cuts
transfer to the region
(TKD) which continues from 2025 to 2026 is a big challenge for the business world, especially in the regions.
Apindo Public Policy Member Ajib Hamdani assesses that this fiscal policy has the potential to trigger new pressure in the form of increasing local taxes and have a direct impact on business activities.
“This is a central issue for friends in the regions, because in 2025 the policy that will be continued in 2026 is cutting transfer funds to regions, TKD funds,” said Ajib in a press conference at the Apindo Head Office, South Jakarta, Monday (8/12).
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He explained that many regional governments have relied heavily on transfer funds from the center.When there is a TKD cut whose value is said to exceed IDR 290 trillion, it is believed that regions will be encouraged to be more aggressive in collecting taxes to cover the budget shortfall.
“In fact, in many of these regions, they rely on transfer funds from the center to the regions. So when there is a TKD cut, even reaching more than IDR 290 trillion later, the potential will encourage regions to further intensify their taxes. This is a potential problem for us,” he said.
Ajib said that regional regulations do have the authority to collect various types of taxes through Law Number 1 of 2022 concerning Central and Regional Financial Relations.However, the business world hopes that this policy will not actually suppress economic activity in the regions, especially for growing MSMEs.
“Instrumentally it is in Law Number 1 of 2022, but what is hoped by the business world, especially MSMEs in the regions, is not to intensify taxes due to the TKD reduction factor, because regional friends will automatically be creative in increasing their regional taxes, but don’t let it be counterproductive to the businesses that are growing in the regions,” he said.
Apart from the impact from the regional side, Apindo also highlighted technical tax issues at the central level, especially regarding the Coretax tax system which is considered to be disrupting business activities.Ajib said the Coretax issue was an additional burden for the business world amidst existing fiscal pressures.
“What the business world is hoping for is how this government can be more creative, don’t just pursue taxes. How Coretax can also be improved, because Coretax really disrupts internal financial circulation, taxation issues and technical issues are very disturbing,” he said.
When tax revenues face pressure, the government generally only has two options, namely increasing debt or cutting spending.
In fact, according to Ajib, optimizing PNBP could be an alternative for maintaining fiscal health without adding direct pressure to the business world.
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