Introduction
The protest that erupted in Pati Regency, Central Java, in August 2025 came as a surprise to many observers because of how rapidly they escalated and the scale of participation.
A sharp 250% increase in the local property tax, known as Pajak Bumi dan Bangunan Perdesaan dan Perkotaan (PBB-P2), was initially seen as a routine fiscal adjustment. Yet, within days, it triggered widespread resistance, drawing thousands of residents from different social and economic backgrounds.
The demonstrations quickly grew into one of the largest ever recorded in the region.
This development shows that f
The Protest
Despite the central government’s response, the reality on the ground in Pati shows that the resistance to the tax hike spread and expanded quickly.
The sudden shift shocked the residents, and, to make matters worse, Pati’s Regent Sudewo taunted the public to mobilise tens of thousand
What began as a protest expected to draw around 5,000 participants eventually grew into a crowd of nearly 75,000 people, making the 13 August demonstration one of the largest in Pati’s modern history.
The fiscal policy, introduced abruptly and at such a scale, created what economists call a tax shock. The impact was felt most acutely by low- and middle-income households that lacked the financial capacity to absorb the sudden increase. Not only would this reduce their purchasing power, it would also lead to reduced consumption of household staples and widen the gap between the haves and have nots. Even after the policy was officially revoked, demonstrations did not subside, evolving into political demands calling for Sudewo to resign.
This situation leads to an important question about how it should be understood. Are the protests in Pati mainly the result of local conditions shaped by history and culture, or do they point to broader structural problems in Indonesia’s fiscal and political system that may surface in other regions as well?
Not Just Pati
To answer that question, it is important to look beyond Pati. Pati is not the only region that has raised its Pajak Bumi dan Bangunan (Land and Building Tax). Similar increases have taken place in Semarang, Bone, Jombang and Cirebon, with some areas reporting hikes of up to 1,000%.
For many residents, especially in districts where average household income is relatively low, such drastic changes are immediately felt and often seen as unbearable. This has triggered resistance in different forms, ranging from individual protests to organised action.
A story that unfolded In Jombang, for example, showcases a resident who publicly protested when his tax bill rose from Rp400,000 to Rp1.35 million within a year. In Cirebon, anger developed into a demonstration led by the Paguyuban Pelangi who demanded the cancellation of the tax increase and the repeal of the local regulation that facilitated it. The group’s coordinator, Hendrawan Rizal, stated that his tax bill had jumped from Rp6.4 million to Rp63 million, a figure far beyond what most citizens could manage.
Unintended Effects of Efficiency
But why are many local governments resorting to such drastic tax hikes in the first place?
The rise of PBB rates in several regions is a sign that national fiscal policies play an important role in shaping local government decisions. In Pati, the increase in PBB-P2 reflected the response of the local administration to a decline in fiscal transfers from the central government. This followed Presidential Instruction No 1 of 2025 that reduced the central government’s funding to regional governments by Rp50.6tn.
Faced with shrinking resources, many local governments were encouraged to generate more Pendapatan Asli Daerah (Locally Generated Revenue – PAD). Finance Minister Sri Mulyani had earlier urged regional leaders to find new and innovative ways to fund development without relying too heavily on Anggaran Pendapatan dan Belanja Negara (national budget – APBN) or Anggaran Pendapatan dan Belanja Daerah (regional budgets – APBD). At a retreat for local leaders in early 2025, she explicitly called on them to explore alternative financing models.
Under this pressure, several regions, including Pati, adopted higher PBB-P2 rates (a 250% increase) as the fastest way to close fiscal gaps.
The implementation of this policy in Pati led to wide social consequences. It has been put forward that PBB-P2 is relatively easy for local governments to adjust since its rates are determined by the assessed property value base (Nilai Jual Objek Pajak – NJOP). While this makes the tax a convenient tool for boosting revenue, the decision in Pati was also influenced by local political factors, including the need to fund ambitious programmes promised after the last regional election.
The central government, however, rejected the idea that its efficiency policy was directly responsible for the unrest in Pati. Hasan Nasbi, Head of the Presidential Communications Office, stated that the austerity measures are applied uniformly across all regions, ministries and agenci
As depicted above, the protests indeed took place in other parts of the country.
The protest in Pati can be understood at both national and local levels.
Nationally, it shows the impact of fiscal policy that pushes local governments to seek quick sources of revenue. Heavy dependence on transfers fr
Locally, the unrest in Pati is rooted in accumulated dissatisfaction with economic woes. Although the 250% tax hike serves as the trigger, the people’s frustration has been building up for a while.
The controversy over the dismissal of 220 contract workers at RAA Soewondo Pati hospital in mid-2025 further deepened public distrust, just at the time when the data was showing that poverty in Pati was rising. Developments and pressures such as these have left many households vulnerable or feeling threatened, and thus additional financial burdens, such as the stratospheric tax hike, could easily spark the fire.
Historical and political contexts amplify these grievances. Pati carries the legacy of Saminism, a tradition of resistance to state authority when it is seen as unjust, especially over land and taxation. This collective memory shaped how communities interpreted the policy, seeing it not only as an economic burden but also as a question of justice.
When combined with Sudewo’s confrontational leadership style, the public had no reason not to air out their anger. His taunt was perceived as an act of arrogance, giving further momentum to the protests. What began as opposition to a fiscal policy became a broader movement challenging the legitimacy of local leadership.
Lessons
The protests in Pati offer an important lesson for both central and local governments.
Fiscal efficiency is necessary, but policies must be designed carefully so they do not weaken the ability of local administrations to provide essential services such as infrastructure and welfare. Cuts in central transfers may encourage local governments to seek new revenue, yet sudden and steep tax increases during economic hardship can place heavy pressure on citizens and heighten social tensions. The key is to balance fiscal needs with sensitivity to public conditions. New revenue is important, but it should be pursued with caution, empathy and clear communication. Policies that ignore the economic situation risk deepening dissatisfaction, while transparent and well-planned measures can strengthen trust. In this way, fiscal reform can become a step toward stability and shared progress rather than a source of unrest.
