The Finance Ministry and state asset fund Danantara are at odds over who controls dividends from state-owned enterprises (SOEs), exposing an unresolved question at the heart of Indonesia's new state-asset architecture. Before Danantara was created, SOE dividends were paid to the state and recorded as non-tax revenue. Under the new framework, Danantara manages the shares and assets transferred to it and can use returns from those assets for investment and capital injections. Part of its eventual profits is to be transferred to the state after provisions for investment risks and capital accumulation. The dispute therefore is not simply about whether the government can receive SOE dividends, but about when and through what mechanism those funds should reach the state budget.

The row began on Aug. 28, when then-finance minister Purbaya Yudhi Sadewa said that, following a limited cabinet meeting with President Prabowo Subianto, the Finance Ministry would channel Rp 120 trillion (US$6.76 billion) of SOE dividends into the state budget as a fiscal buffer. The figure followed the President's address to the House of Representatives two weeks earlier, when he projected dividends from Danantara-managed SOEs at Rp 200 trillion.

Three days later, Danantara chief operating officer Dony Oskaria said he knew nothing about the plan and referred reporters to chief executive Rosan Roeslani. Purbaya responded on Sept. 3, saying Danantara was resisting a transfer it had promised the President it would make. Rosan responded on Sept. 9, denying that such a handover had been discussed.

The disagreement comes as the fiscal outlook has become tighter. The 2026 budget deficit is projected to widen from Rp 689.1 trillion, or 2.68 percent of GDP, to Rp 734.3 trillion, or 2.85 percent. Total government debt rose from Rp 9.92 quadrillion in March 2026 to Rp 10.29 quadrillion at the end of June. New borrowing is expected to rise from Rp 775.9 trillion in 2025 to Rp 832.2 trillion in 2026, while spending is projected to increase from Rp 3.84 quadrillion to Rp 3.98 quadrillion to fund priority programs, food price stabilization, purchasing-power support, transfers to regional governments, disaster management and special autonomy funds.

The numbers help explain the Finance Ministry's interest in bringing more funds into the budget. But the legal structure created by Danantara makes the timing and form of that transfer less straightforward than under the previous system.

The Supreme Audit Agency (BPK), in its audit of the 2025 Central Government Financial Report, found that 40 SOEs contributed Rp 11.7 trillion in non-tax revenue to the state, while 16 SOEs placed Rp 131.4 trillion with PT Danantara Asset Management (DAM), Danantara's operational arm. Of the funds placed with DAM, Rp 79.9 trillion was recorded as Danantara dividends, while Rp 70 trillion was invested in PT Danantara Investment Management (DIM) and Rp 34.8 trillion was used for capital injections into SOEs.

The change in the flow of funds reflects Danantara's new position in the SOE ownership structure. Under Law No. 16/2025, the fourth amendment to the SOE Law, the state retains 1 percent of shares in SOEs as Series A Dwiwarna shares through the SOE Regulatory Agency (BP BUMN), while 99 percent of the Series B shares are held through Danantara. The arrangement separates the state's regulatory and controlling role from Danantara's role in managing the investment and corporate assets.

That distinction matters to the dividend dispute. Under the amended SOE Law, Danantara can manage dividends from the holdings and SOEs under its control and use the funds for investment. Its investment gains and losses are treated as Danantara's own before provisions are set aside. If it makes a profit, part of it is designated as state profit and transferred to the state treasury after provisions for investment losses and capital accumulation.

A separate provision in the newer regulatory framework adds another layer to the debate. Government Regulation (PP) No. 19/2026, which amends PP No. 10/2025 on Danantara's organization and governance, allows Danantara to establish different types of investment holdings. Article 29B distinguishes a commercially oriented investment holding from one established to support national development and public services, as well as a third category for other purposes approved by the President. DIM is assigned to operate the commercially oriented holding under Article 32B.

Article 31A deals specifically with the development-oriented holding, rather than Danantara's investment holdings generally. If that holding carries out activities to support national development, the state may provide it with a capital injection (PMN) from the state budget. The provision allows the injection to take the form of fresh funds, state-owned goods, state receivables from SOEs or other limited liability companies, and other state assets. The holding can also request such support through Danantara. Once it receives the PMN, the holding becomes a SOE designated as a fiscal instrument.

The resulting architecture leaves Danantara with a substantial investment role while preserving a route for profits to return to the state. The Finance Ministry, meanwhile, has an immediate fiscal interest in those funds as it manages a wider deficit and rising borrowing needs. The current dispute reflects the tension between those two functions.