Jakarta. The Home Affairs Ministry has ordered regional leaders to roll back steep hikes in land and building taxes (PBB)  after protests over the issue turned violent in parts of the country.

Deputy Home Affairs Minister Bima Arya Sugiarto said Tuesday that a circular letter has been issued directing governors, regents, and mayors to cancel or suspend increases in rural and urban land and building taxes (PBB-P2) that exceed 100 percent.

“We have noted that several regions imposed increases above 100 percent. These must be reviewed, and we are urging that such policies be revoked or delayed,” Bima told reporters. He added that while some regions had already backtracked, others needed to follow suit.

The intervention comes after a protest in Bone Regency, South Sulawesi, over higher property taxes spiraled into clashes last week, injuring at least five security officers. Demonstrators stormed the local regent’s office, throwing stones before being dispersed by tear gas. The Bone administration later announced it would postpone the planned tax hike of 65 percent, after rumors of a 300 percent increase fueled public anger.

Similar unrest has erupted across Java, where homeowners in Pati, Jombang, and Semarang reported tax bills soaring by several hundred percent. In Cirebon, some residents claimed property taxes had jumped tenfold, though local officials denied the figure. In Pati, protests escalated into demands for the regent’s resignation and impeachment proceedings by the local legislature.

According to Bima, many of the tax hikes were unilateral initiatives by local leaders seeking to boost regional revenue (PAD), sometimes introduced during election periods. “This was a local initiative to increase PAD, often taken before a new administration is formed,” he said.

Economists warn the controversy underscores deeper fiscal challenges. Central government transfers to regions have stagnated as Jakarta ramps up national spending on welfare and infrastructure, forcing local administrations to rely more heavily on property taxes.

“Local governments are under pressure as fiscal space narrows. Raising property taxes has become the easiest, though politically risky, solution,” said Deni Friawan, a senior researcher at the Centre for Strategic and International Studies (CSIS).

In the draft 2026 state budget, the central government is targeting Rp 2,357.7 trillion ($144 billion) in tax revenue, a 13.5 percent increase from this year’s outlook. Analysts say this push for higher collections is cascading down to local governments.

Instead of relying on sharp tax hikes, Bima urged regional leaders to pursue more innovative ways to strengthen local revenue. “We are encouraging regional heads to be more creative and explore other sources of income,” he said.

Add as a preferred source on Google +