Jakarta. Sharp hikes in land and building taxes in several regions in Java are fueling public anger and political turmoil, with residents in several regions staging protests and economists warning that the increases are linked to shrinking central government transfers to local administrations.

The most dramatic increases have been reported in Central and East Java, where residents in Pati saw property tax rates jump by up to 250 percent, while some homeowners in Jombang and Semarang faced bills surging more than 400 percent. In Cirebon, residents said their land and building taxes (PBB) spiked as much as 1,000 percent, though the mayor disputed the figure.

Economists say the hikes are the consequence of tighter fiscal constraints. “Local governments are facing shrinking fiscal space as central transfers (TKD) decline, forcing them to look for new revenue sources,” said Deni Friawan, a senior researcher at the Centre for Strategic and International Studies (CSIS), on Monday.

He warned that large-scale spending on national priority programs is crowding out funds for the regions, pushing local governments to raise taxes.

Fellow CSIS researcher Riandy Laksono echoed the concern, arguing that withholding transfers dries up local revenue streams. “This is a logical consequence of fiscal efficiency,” he said, urging the government to restore transfer levels and loosen restrictions on regional spending to support local economies.

The central government, meanwhile, is aiming to collect Rp 2,357.7 trillion ($144 billion) in tax revenue in the draft 2026 state budget, a 13.5 percent increase from the 2025 outlook.

Syafruddin Karimi, an economist at Andalas University, warned that raising land and building taxes in the current climate is counterproductive. He argued that now is the wrong time for such adjustments and urged local governments to seek more creative revenue sources that do not erode household purchasing power.

“Higher property taxes will suppress household consumption, the main driver of national economic growth,” Syafruddin said.

The tax hikes have triggered a wave of unrest. In Pati, Central Java, tens of thousands of residents stormed the regency hall last week, demanding the resignation of Regent Sudewo after he approved tax hikes of up to 250 percent. The protest turned violent when frustrated crowds hurled bottles and vegetables at police, who fired tear gas to disperse them. Several women were injured, and the local legislature has since initiated impeachment proceedings against the regent.

In Semarang’s Ambarawa district, residents were shocked to find their annual tax bills quadrupling. A 69-year-old homeowner, Tukimah, said her tax jumped from about Rp 161,000 ($10) in 2024 to Rp 872,000 ($53) this year. “I was shocked when I saw the number. I filed an objection, but there’s been no response,” she told Beritasatu.com. Local officials said the increases were due to reassessments of property values, particularly for land located along major tourism and provincial access routes.

In Cirebon, discontent is also mounting. Veteran community leader Darma Suryapranata, 83, said his tax bill skyrocketed from Rp 6.3 million in 2023 to Rp 65 million in 2024. “This is outrageous. People are still recovering from the pandemic, and now we face this burden,” he said. The city government denied taxes had risen by 1,000 percent but admitted increases were implemented and promised a review.

President Prabowo Subianto pledged to keep the state budget deficit under 3 percent of GDP while funding ambitious welfare programs such as free nutritious meals for schoolchildren. Economists warn that without adjustments, local governments will continue to pass the burden onto households, potentially igniting further unrest.

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