Government mandates Rp 120 trillion SOE dividend transfer to state budget in major policy shift
Indonesia's state-owned enterprises will transfer Rp 120 trillion (US$6.76 billion) in dividends to the state budget this year through Danantara, the state asset holding company, Finance Minister Purbaya Yudhi Sadewa announced on Friday. The decision represents a significant departure from the fund's original operational framework.
The minister said the dividend amount had been discussed and agreed upon with Danantara CEO Rosan Roeslani and President Prabowo Subianto. "It has been discussed, it has been ascertained. All that's left to decide is when to transfer it; around Rp 120 trillion. That's what the President decided," Purbaya told Kompas.com.
The Rp 120 trillion target represents a substantial 39% increase from the Rp 86.4 trillion in SOE dividends collected in 2024, marking one of the largest year-over-year increases in state dividend revenue in recent Indonesian history.
When approached by reporters following a coordination meeting at the Senayan Legislative Complex in Central Jakarta on Monday, Danantara chief operating officer Dony Oskaria declined to comment on the announced sum. The meeting included Purbaya, Bank Indonesia officials and lawmakers.
Shift from original model
The dividend transfer marks a fundamental change in Danantara's operating principles. Officially established in December 2024 through Government Regulation No. 24/2024, Danantara consolidated oversight of major state-owned enterprises including Pertamina, PLN, and Bank Mandiri under a single holding structure.
When Danantara launched operations in 2025, SOE dividends were directed to the holding company rather than the state budget. Under this arrangement, Danantara managed the funds for expansion and reinvestment throughout 2025, following a model inspired by sovereign wealth funds like Singapore's Temasek Holdings, which retains and reinvests profits from state-linked companies.
That reinvestment-focused setup was intended to continue indefinitely, until the government reversed course earlier this month. The new policy requires Danantara to remit dividends directly to state coffers, aligning with broader fiscal consolidation objectives.
Fiscal context and revenue targets
The policy shift comes as Indonesia pursues fiscal deficit reduction, with the government targeting a deficit of 2.45% of GDP in 2026, down from 2.7% in 2025. Meeting this consolidation goal requires increased revenue from various sources, including SOE dividends.
The Rp 120 trillion in expected SOE dividends will account for approximately 22% of Indonesia's projected Rp 545.4 trillion in non-tax revenue for 2026, underscoring the significant role state enterprise profits play in budget planning.
Under Indonesian law, SOE dividend payments must be approved through annual general shareholder meetings, with the state as majority or sole shareholder holding authority to determine dividend distribution policies. This legal framework provides the mechanism through which President Prabowo can mandate the dividend transfers announced by the Finance Minister.
SOE profitability and capacity
Major state-owned enterprises under Danantara's management include Pertamina in oil and gas, PLN in electricity, Bank Mandiri and BNI in banking, and Telkom in telecommunications. These companies collectively reported combined net profits exceeding Rp 200 trillion in 2025, indicating substantial capacity to meet the dividend requirements.
Rosan Roeslani, who was appointed as Danantara's CEO in January 2025, brings extensive business credentials to the role, having previously served as chairman of the Indonesian Chamber of Commerce and Industry from 2015 to 2021.
Finance Minister Purbaya Yudhi Sadewa, appointed to his position in October 2025, has been central to implementing the new dividend policy as part of the Prabowo administration's fiscal strategy.
Concerns over long-term investment
The policy reversal has prompted debate among economic analysts about potential trade-offs between immediate budget needs and longer-term strategic investment. Some analysts have expressed concerns that reducing retained earnings at Danantara could lead to underinvestment in strategic infrastructure and SOE modernization.
Under the original model, retained earnings were intended to fund expansion projects without increasing state debt levels. The shift to dividend remittances means these funds will now flow to general budget purposes rather than being earmarked for SOE development and infrastructure projects.
The government has not publicly detailed how it plans to balance current revenue requirements with the need for ongoing investment in state enterprise capacity and competitiveness.
