Economist and University of Indonesia Professor Mohamad Ikhsan believes that the government will be unable to meet the 17+8 demands raised by labor groups following the nationwide demonstrations in late August 2025.

“The 17+8 demands cannot be met. It’s simply impossible,” Ikhsan said during the Katadata Policy Dialogue: One Year of the Prabowo–Gibran Administration held in Jakarta on Tuesday, October 21, 2025.

According to Ikhsan, three of the demands specifically target economic ministries, urging them to ensure decent wages for all workers, prevent mass layoffs, and open structured dialogue with labor unions to find a fair solution for the minimum wage policy.

He cited that one of the core reasons the government is unable to meet these demands is the country’s persistent struggle with the middle-income trap ‒ a condition where a nation successfully transitions from a low-income to a middle-income economy but fails to advance into a high-income one.

“To escape the middle-income trap, we need major improvements in bureaucratic quality and institutional capacity,” Ikhsan said.

He added that the challenge is compounded by the government’s limited ability to boost tax revenue, while household consumption remains under pressure.

Ikhsan also highlighted the personal income tax (PPh) as an underperforming source of state revenue. He noted that 85 percent of total tax revenue comes from just 15 percent of taxpayers ‒ a sign of limited compliance.

“Very few people pay income tax properly. Most of us don’t pay PPh at all. Value-added tax (VAT) is collected from everyone who spends, but PPh is different,” he said.

Ikhsan further pointed out that many companies deliberately avoid paying income tax, while even among the 15 percent who do pay, most fail to pay the correct amount.

“Even among those who pay, many don’t do it properly ‒ as if just paying something is enough,” he said.