Jakarta. President Prabowo Subianto has instructed Finance Minister Purbaya Yudhi Sadewa to focus on improving Indonesia’s tax collection and reviewing the country’s export proceeds retention policy as part of efforts to strengthen fiscal stability and economic growth.

The directive was delivered during a closed meeting at Prabowo’s private residence in Jakarta, on Thursday, Presidential Secretary Prasetyo Hadi said.

“The president placed strong emphasis on the performance of tax revenue, which remains the main source of state income,” Prasetyo said in a statement. “We expect to see significant progress under the leadership of the new finance minister.”

Prabowo also asked Purbaya to conduct a comprehensive evaluation of the export earnings policy, known locally as DHE, to ensure it effectively supports national economic stability.

“The president wants continuous review of financial regulations, including those related to export earnings,” Prasetyo said. “The goal is to ensure the policy truly benefits the economy and operates optimally.”

Earlier this year, the government issued Government Regulation No. 8/2025, replacing an earlier rule on export proceeds from natural resource sectors. The regulation, which took effect on March 1, 2025, requires exporters in mining, plantation, forestry, and fisheries to retain 100 percent of their export proceeds in Indonesia’s financial system for at least 12 months.

However, officials have acknowledged that the rule has not delivered the expected boost to foreign-exchange reserves, which fell to $148.7 billion in September, down from $150.7 billion a month earlier, according to Bank Indonesia.

Chief Economic Affairs Minister Airlangga Hartarto said the government will reassess the policy due to disruptions in fund transfers that have affected exporters’ compliance. “The challenge doesn’t come from exporters themselves but from inefficiencies in fund transfers. We will evaluate this thoroughly,” he said earlier this week.

The government’s 2026 state budget targets total revenue of Rp 3,147.7 trillion ($189.9 billion), up 9.8 percent from the previous year, with tax revenue expected to reach Rp 2,357.7 trillion, or 13.5 percent year-on-year growth. As of the end of September, Indonesia had collected Rp 1.3 quadrillion in taxes,  roughly 62 percent of the annual target, according to the Finance Ministry.

To maintain fiscal balance amid slowing consumption, Purbaya said the government may consider lowering the value-added tax (VAT) rate if economic conditions weaken further. “We’ll see how the economy performs and how much revenue we collect by year’s end. It’s still too early to decide,” he said on Tuesday.

Under the Tax Regulation Harmonization Law, Indonesia’s VAT rate was scheduled to rise from 11 percent to 12 percent in 2025. But due to public opposition, the higher rate currently applies only to luxury goods, while most goods and services remain taxed at 11 percent.

Retail industry leaders have urged the government to cut the VAT to 9 percent to stimulate household spending, the backbone of Indonesia’s economic growth. “A lower VAT would send a strong signal of the government’s commitment to domestic markets and consumers,” said Roy Nicholas Mandey, chairman of the Affiliation of Global Retail Association (AGRA).

Indonesia’s VAT remains higher than those of neighboring economies such as Singapore (9 percent), Vietnam (7–8 percent), and Thailand (7 percent). Roy said that trimming the rate could invigorate consumption and attract new investment, helping Indonesia compete with Vietnam, whose economy grew 7.89 percent last year.