Economist: Tensions in Pati Stem from Central Government Fiscal Policy

August 13, 2025 | 06:31 pm

TEMPO.CO, Jakarta - Economist from Andalas University, Syafruddin Karimi, said the unrest in Pati, Central Java, cannot be separated from the impact of the central government's policy.

The decision by Pati Regent Sudewo to raise the Land and Building Tax rates by up to 250 percent is a result of the central government’s budget cuts to regional transfers.

According to Syafruddin, the cuts have pressured local governments to boost their own revenue. President Prabowo Subianto previously reduced the regional transfer budget (TKD) by Rp 50 trillion in 2025.

"This pressure directly burdens the public and sparks tensions, as seen in Pati," he said on Wednesday, August 13, 2025.

Syafruddin noted that the Pati case reflects conditions in other regions. He urged the central government to manage fiscal relations between the central and regional administrations more fairly. "The risk of social instability could spread if fiscal pressures and similar policy responses continue," he said.

He added that the tax hike in Pati was implemented without public participation and was not accompanied by improved public services. Without a fair balance between tax burdens and public benefits, he said, the legitimacy of the government's tax policy would weaken and potentially face public resistance.

"Raising the Land and Building Tax without involving the public gives the impression of arrogance in power. This shows that the relationship between fiscal policy and public trust is fragile," Syafruddin said.

He called on the government to reconsider policies that burden the public and to renegotiate the social contract to maintain trust.

Although economic growth on paper has improved, Syafruddin argued that it has not significantly boosted purchasing power or welfare. In this context, increasing taxes could erode public trust and slow economic recovery.

Pati Regent Sudewo previously justified the 250 percent tax increase, claiming it had been discussed with community representatives. However, residents opposed the move, saying it would add to economic hardship. Sudewo refused to revoke the policy and even challenged his critics, stating that he would still face them even if 50,000 people protested.

This stance drew criticism from various parties. On August 13, 2025, demonstrations in front of the Regent’s Office escalated, prompting police to fire tear gas and water cannons at crowds demanding Sudewo’s resignation. In the middle of the protest, Sudewo arrived on a police armored vehicle, wearing a white shirt and black fez.

Emerging from the top hatch, he addressed protesters through a megaphone, saying, "I sincerely apologize."

The crowd responded by throwing mineral water bottles. Security personnel shielded Sudewo, who then returned to the vehicle.

Jamal Abdun Nashr contributed to the writing of this article.

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