Indonesia Cancels Customs Official Layoffs Due to Legal Concerns, Opts for Transfers

Indonesia’s Finance Minister Explains Why Mass Layoffs at Customs Were Ruled Out

Indonesia’s Finance Minister Purbaya Yudhi Sadewa explained Wednesday, February 4, 2026, why the government ultimately decided against laying off employees within the Directorate General of Customs and Excise (DJBC) despite ongoing large-scale reforms.

According to Minister Sadewa, the move was deemed impossible due to existing civil service regulations and the potential for legal challenges.

“When it comes to taxes, finance, or civil servants, we can’t just arbitrarily lay people off. I asked, ‘Can I just lay people off?’ It turns out we can’t. We could be sued in the State Administrative Court (PTUN) and lose. So, it didn’t happen ” Sadewa stated during a working meeting with Commission XI of the Indonesian House of Representatives in Central Jakarta.

Instead of layoffs, the Ministry of Finance opted for job rotations and transfers as part of its internal reform efforts. Approximately 34 officials at DJBC, particularly those in central positions and deemed to have suboptimal performance, have already been replaced.

This action is described as a “shock therapy” approach intended to improve oversight and service delivery.

Similar reforms are underway at the Directorate General of Taxes. Within the near future, more than 45 tax officials will be transferred from areas considered “lucrative” to less busy regions.

These rotations target employees who are believed to maintain close relationships with specific taxpayers.

“This week, we will transfer more than 45 people to quieter locations,” Sadewa said.

Conversely, employees recognized for their integrity and strong performance will be placed in more strategic positions. The government hopes this approach will improve governance without violating existing legal provisions.

Sadewa also mentioned legal action being taken against officials in various regions, including arrests made by the Corruption Eradication Commission (KPK).

He affirmed that the government will not interfere with the legal process, while still providing appropriate legal support.

“I will provide legal assistance, but I will not intervene. If someone is guilty, they are guilty. If they are not, they should not be abused,” he emphasized.

Indonesia is currently facing domestic economic discontent and a challenging global environment, less than a year into the Prabowo presidency, with protests occurring in August, according to reports from December 15, 2025.

All 34 Indonesian provinces have been impacted by lockdowns and the country has the highest number of virus-related deaths among Southeast Asian nations.

Employment laws related to migrant worker protection are also under scrutiny, with a study highlighting socioeconomic inequalities faced by migrant workers in Indonesia and Malaysia. The study, published October 24, 2025, identifies challenges in law enforcement, including worker vulnerability to exploitation and limited access to legal information. Indonesia’s decentralized system contributes to fragmented and inconsistent law enforcement across regions.