The proposed shake up - which also takes aim at condom use and adultery - is winning unprecedented support ahead of 2019 presidential elections, after earlier attempts to shake up Indonesia's Dutch-colonial era laws fizzled.
Parliament is drawing up the new code with all the major political parties reportedly on board and the draft is expected to be tabled in the coming months.
Wide swathes of Indonesian society - including heterosexual couples who might face jail for having sex outside wedlock or having an affair - may be impacted if the laws pass.
But the Southeast Asian nation's small LGBT community could feel the sting most.
"Some politicians see it as an opportunity to cater to the religious base," said political analyst Yuventius Nicky.
"There's this supposed morality threat that is being queer."
Gay dating apps
Government officials, religious hard-liners and influential Islamic groups have lined up to make anti-LGBT statements in public recently.
In January, Google pulled one of the world's largest gay dating apps from the Indonesian version of its online store in response to government demands.
And police have used a tough anti-pornography law to criminalise members of the lesbian, gay, bisexual and transgender (LGBT) community.
Parliamentary speaker Bambang Soesatyo called this week for a crackdown on the community's "excesses", after the health ministry announced it would release a medical guide classifying homosexuality as a "mental disorder".
Gay sex is currently legal everywhere in secular Indonesia except for Aceh where it is banned under the semi-autonomous province's Islamic law.
The UN human rights chief blasted Indonesia's proposed laws and raised them in talks with President Joko Widodo this week.
"The hateful rhetoric against this (LGBT) community that is being cultivated seemingly for cynical political purposes will only deepen their suffering and create unnecessary divisions," UN High Commissioner for Human Rights Zeid Ra'ad Al Hussein told reporters.
"Any discriminatory provisions (in the new law) need to be removed," he added.
The code's latest draft carries a five-year jail term for extramarital sex or adultery, fuelling concerns that same-sex couples, who cannot marry in Indonesia, could be caught up in the dragnet.
It also carries penalties for "showing or offering contraception tools without authorisation" and calls for stiffer blasphemy sentences.
Supporters of the changes include the Family Love Alliance, a lobby group which made a failed attempt to get the constitutional court to outlaw extramarital and same-sex relations.
"Gay sex is deplorable," said Alliance leader Rita Soebagio.
KEEP UPDATED on the latest news by subscribing to our FREE newsletter.
- FOLLOW News24 on Twitter