Budget Committee of the House of Representatives has cautioned the government against raising tax rates in its effort to meet the 2026 revenue target as outlined in the Draft State Budget (RAPBN).

Budget committee chairman, Said Abdullah, said the 2026 tax revenue target is set at Rp2,692.02 trillion(US$164.5 billion), up from Rp2,387.3 trillion in 2025.

“People’s economic condition is currently far from good,” Abdullah said during a virtual hearing with the government on Thursday, August 21, 2025.

While expressing support for the higher target, Abdullah urged the Directorate General of Taxes and the Directorate General of Customs and Excise to focus on expanding the tax base rather than burdening existing taxpayers.

“They should not ‘hunt in the zoo’ but instead ‘expand the zoo’,” he said, using a metaphor to emphasize the need for enlarging business capacity and broadening the number of taxpayers to boost state revenue.

Abdullah highlighted that the rapidly shifting global economic and geopolitical landscape continues to create volatility in markets and the domestic economy.

He called for swift, flexible, and responsive policies. “Fiscal and monetary policies must be integrated to provide clear navigation, avoid sending mixed signals to economic players, and most importantly safeguard national interests,” he said.

On the spending side, Abdullah voiced concern over a steep reduction in the Transfer to Regions and Villages Fund (TKDD), which will fall to Rp650 trillion in 2026 from Rp919 trillion in 2025, a cut by Rp269 trillion.

He warned that such a reduction could undermine public services and development at the regional level.

“Strengthening regional budgets and fiscal capacity is an integral part of our constitutional mandate on regional autonomy,” he cited.