Indonesia plans to optimize state revenue from coal to capture windfall profits as global energy prices rise, aiming to strengthen its fiscal position amid geopolitical tensions in the Middle East, a senior minister said on Thursday.
Coordinating Minister for Economic Affairs Airlangga Hartarto said the government is evaluating a potential export tax on coal following price increases linked to disruptions in crude oil and liquefied natural gas supply.
“A team will review the tax level. We expect government revenue to increase from these windfall gains,” he told a press conference at the Presidential Palace complex in Jakarta.
To support the policy, the government plans to revise the 2026 Coal Mining Work Plan and Budget (RKAB) to better align production targets with market conditions and revenue objectives.
Beyond commodities, President Prabowo Subianto has ordered the acceleration of the conversion of diesel power plants to solar energy to reduce reliance on fuel imports and lower domestic energy costs.
“The president has instructed that this be implemented immediately. Danantara has been tasked with addressing technical issues related to solar power conversion,” Hartarto said.
Despite rising spending pressures, the government will maintain a strict fiscal stance. Hartarto said the budget deficit will remain below the legal ceiling of 3 percent.
“The president’s main directive is to safeguard the state budget. We must ensure the deficit stays within the 3 percent legal limit,” he added.
The government is also reviewing operational spending across ministries to improve efficiency. Proposed measures include more flexible working arrangements for civil servants to reduce administrative and utility costs.
Further technical details are being finalized and will be announced once the implementation framework is ready.
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Translator: Martha Herlinawati Simanjuntak
Editor: Primayanti
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