GOVERNMENT REGULATION NO. 84/2001 DATED DECEMBER 31, 2001
TENTANG
THE AMENDMENT TO GOVERNMENT REGULATION NO. 104/2000 ON THE EQUILIBRIUM FUND THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
Considering :
a. that in order to implement the provision in Article 10 of Law No. 25/1999 on the financial equilibrium between the central and regional governments, Government Regulation No. 104/2000 on the financial equilibrium has been stipulated;
b. that since the formula of stipulation of general allocation funds and mechanism of reporting their use as stipulated in Government Regulation No. 104/2000 cannot yet realize the principle of inter-region justice, transparency and accountability as meant in Law No. 25/1999, it is deemed necessary to make adjustment;
c. that in relation thereto, it is deemed necessary to amend Government Regulation No. 104/2000 by issuing a government regulation.
In view of :
1. Article 5 paragraph (2) of the Constitution of 1945 as already amended by the Third Amendment to the Constitution of 1945;
2. Law No. 7/1983 on income tax (Statute Book of 1983 No. 50, Supplement to Statute Book No. 3263) as already amended several times and the latest by Law No. 17/2000 (Statute Book of 2000 No. 127, Supplement to Statute Book No. 3985);
3. Law No. 12/1985 on land and building (Statute Book of 1985 No. 68, Supplement to Statute Book No. 3312) as already amended by Law No. 12/1994 (Statute Book of 1994 No. 42, Supplement to Statute Book No. 3569);
4. Law No. 20/1997 on non-tax state receipts (Statute Book of 1997 No. 43, Supplement to Statute Book No. 3687);
5. Law No. 21/1997 on land and building title acquisition fees (Statute Book of 1997 No. 44, Supplement to Statute Book No. 3688) as already amended by Law No. 20/2000 (Statute Book of 2000 No. 130, Supplement to Statute Book No. 3988);
6. Law No. 22/1999 on regional administration (Statute Book of 1999 No. 60, Supplement to Statute Book No. 3839);
7. Law No. 25/1999 on the financial equilibrium between the central and regional governments (Statute Book of 1999 No. 70, Supplement to Statute Book No. 3848);
9. Government Regulation No. 104/2000 on the equilibrium fund (Statute Book of 2000 No. 201, Supplement to Statute Book No. 4021);
10.Government Regulation No. 20/2001 on the fostering and supervision over the implementation of regional administration (Statute Book of 2001 No. 41, Supplement to Statute Book No. 4090);
DECIDES :
To stipulate :
THE GOVERNMENT REGULATION ON THE AMENDMENT TO GOVERNMENT REGULATION NO. 104/2000 CONCERNING THE EQUILIBRIUM FUND
Article I
Several provisions in Government Regulation No. 104/2000 on the equilibrium fund are amended as follows : 1. The provisions in Article 17 paragraphs (3), (4), and (5) are amended so as to entirely read as follows :
"Article 17
(1) The general allocation funds for the respective provinces and regencies/cities as meant in Article 16 paragraph (3) are calculated on the basis of the multiplication of the total general allocation funds for the whole regions with weights of the relevant regions, and later divided by the total weights of regions throughout Indonesia.
(2) The weights of regions as meant in paragraph (1) are stipulated on the basis of : a. the need for regional autonomy territory;
b. the regional economic potential.
(3) The need for regional autonomy territory as meant in paragraph (2) letter a constitutes the multiplication of the average total expenditures of regions with the sum of population, territorial size, relative poverty and price expensiveness indexes after being multiplied with weights of the respective indexes.
(4) The regional economic potential as meant in paragraph (2) letter b is calculated on the basis of the estimated total revenues of regions from regional pure income, land and building tax, land and building title acquisition fees, income tax and sharing of results of natural resources.
(5) The general allocation fund of a region is the need for the relevant regional autonomy territory minus the regional economic potential.
(6) The weight of a region is the proportion of the need for general allocation fund of the region to the total need for general allocation funds of the whole regions.
(7) Results of calculation of general allocation funds for the respective regions are stipulated by a presidential decree on the basis of proposals of the Regional Autonomy Advisory Council.
(8) The proposals of the Regional Autonomy Advisory Council as meant in paragraph (7) are made after observing the balancing factor."
"Article 18
(1) The Minister of Finance distributes the general allocation funds to the respective regional cash offices periodically.
(2) Technical directives for the distribution of the general allocation funds as meant in paragraph (1) are further stipulated by a decree of the Minister of Finance."
3. To supplement a new article between Articles 18 and 19 to become Article 18A, which read as follows :
"Article 18A
(1) Governors report the use of general allocations quarterly to the Minister of Finance and Minister of Home Affairs not later than one month after the end of the relevant quarter.
(2) Regents/mayors report the use of general allocation funds quarterly to the Minister of Finance and Minister of Home Affairs not later than one month after the end of the relevant quarter with copies made available to governors as representatives of the government in regions."
Article II
This government regulation comes into force as from the date of promulgation.
For public cognizance, the government regulation shall be published by promulgating it in Statute Book of the Republic of Indonesia.
Stipulated in Jakarta On December 41, 2001
THE PRESIDEN OF THE REPUBLIC OF INDONESIA, sgd.
MEGAWATI SOEKARNOPUTRI
Promulgated in Jakarta On December 31, 2001
THE STATE SECRETARY sgd.
BAMBANG KESOWO
ELUCIDATION ON
GOVERNMENT REGULATION NO. 84/2000 CONCERNING
THE AMENDMENT TO GOVERNMENT REGULATION NO. 104/2000 REGARDING THE EQUILIBRIUM FUND
GENERAL
The general allocation fund as stipulated in Government Regulation No. 104/2000 on the equilibrium fund are allocated to create equitable distribution by observing regional potential, regional size, geographical condition, population and income of communities in regions so that the gap between developed regions and under developing regions can be narrowed.
Yet, in the implementation, the formula of stipulation of the general allocation funds and their reporting mechanism turn out to remain unable to realize the equitable distribution of inter-region financial capabilities, transparency and accountability as mandated by Law No. 25/1999 concerning the equilibrium fund. In relation thereto, the formula and reporting mechanism of the general allocation funds are deemed necessary to improve..
In relation thereto, it is deemed necessary to amend Government Regulation No. 104/2000 on the equilibrium fund in order to speed up the accomplishment of the equitable distribution.
ARTICLE BY ARTICLE
Article I Point 1 Article 17 Paragraph (1)
General allocation funds for both provinces and regencies/cities can be calculated by the following formula :
Total general (weight of the relevant region) allocation funds X ---for regions (total weight of all regions)
Paragraph (2)
The need for regional autonomy territory is also called the regional fiscal need. The regional economic potential is also called the regional fiscal capacity.
Paragraph (3)
The need for regional autonomy territory is calculated by the following formula : The average regional a1 population index + a2 territorial size index + expenditure X a3 relative poverty index + a4 price index
Total expenditures of all regions The average regional expenditure =
---Total regions
Population of region i
Population Index i = ---The average regional population nationally
Size of region i
Regional size index i = ---The average regional size nationally
Total of regional poor population Relative poverty index =
---The average regional poor population
Construction index of region i
Price index i = ---The average regional construction index Paragraph (4)
The regional economic potential is calculated on the basis of the following formula :
Regional Pure Income (PAD) + Land and Building Tax (PBB) + Land and Building Title Acquisition Fees (BPHTB) + Production Sharing of Natural Resources (BHSDA) + Income Tax with the explanation as follows :
PAD is calculated from the adjustment factor of Gross Regional Product of the service industry on the basis of the following formula :
(Gross Regional Product of Service Industry) i
Industrial index of region i = ---(The average of Gross Regional Product of Service Industry Nationally) The calculation of the industrial index results in the formula of the estimated PAD as follows :
PAD (estimated) = â0 + â 1 of Gross Regional Product of Service Paragraph (5up to Paragraph (7)
Sufficiently clear Paragraph (8)
The balancing factor is a mechanism to avoid the possibilities of a decrease in regional capability in financing expenditures, which are borne by the region.
Point 2 Article 18
Point 3 Article 18A
Sufficiently clear
