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    Status : Berlaku

    LAW OF THE REPUBLIC OF INDONESIA
    NUMBER 1 OF 2022

     
    CONCERNING

    FINANCIAL RELATIONS BETWEEN THE CENTRAL GOVERNMENT AND LOCAL GOVERNANCE

    BY THE GRACE OF ALMIGHTY GOD
    THE PRESIDENT OF THE REPUBLIC OF INDONESIA,
     

    Considering
    a.
    that the Unitary State of the Republic of Indonesia is divided into provincial regions and the provincial regions are divided into regencies and municipalities, each of the provinces, regencies and municipalities has local governance;
    b.
    that the local governance regulate and manage their own governmental affairs according to the principle of autonomy and co-administration;
    c.
    that to establish an effective and efficient allocation of national resources, it is necessary to regulate the fair, harmonious and accountable governance of financial relations between the central government and local governance pursuant to Pancasila and the 1945 Constitution of the Republic of Indonesia;
    d.
    that pursuant to Article 18A paragraph (2) of the 1945 Constitution of the Republic of Indonesia, financial relations, public services, utilisation of natural resources and other resources between the central government and local governance are regulated and implemented fairly and harmoniously pursuant to the law ;
    e.
    that pursuant to Article 23A of the 1945 Constitution of the Republic of Indonesia, taxes and other coercive levies for state purposes are stipulated by law;
    f.
    that Law Number 33 of 2004 concerning the Fiscal Balance between the Central Government and Local Governance needs to be improved according to situation developments and the implementation of fiscal decentralisation, thereby, needs to be replaced;
    g.
    that Law Number 28 of 2009 concerning Local Taxes and User Charges needs to be perfected according to situation developments and the implementation of fiscal decentralisation, thereby, needs to be replaced;
    h.
    that based on the considerations referred to in letter a to subparagraph g, it is necessary to establish a Law concerning Financial Relations between the Central Government and Local Governance;
     
     
     
     

    In view of
    Article 5 paragraph (1), Article 18, Article 18A paragraph (2), Article 18B, Article 20 and Article 23A of the 1945 Constitution of the Republic of Indonesia;
     
     
     
     
    With Joint Approval
    HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA
    and
    THE PRESIDENT OF THE REPUBLIC OF INDONESIA
     
     
     
     
    HAVE DECIDED:

    To enact
    LAW CONCERNING FINANCIAL RELATIONS BETWEEN THE CENTRAL GOVERNMENT AND LOCAL GOVERNANCE.
     
     
     
     
    CHAPTER I
    GENERAL PROVISIONS
     

    Article 1
    Referred to herein this Law:
    1.
    Financial Relations between the Central Government and Local Governance is a financial administration system that regulates financial rights and obligations between the central government and local governments that is carried out in a fair, transparent, accountable and harmonious manner pursuant to the law.
    2.
    Central Government hereinafter referred to as the Government, is the President of the Republic of Indonesia who holds the power of government of the Republic of Indonesia assisted by the Vice President and ministers referred to in the 1945 Constitution of the Republic of Indonesia.
    3.
    Minister is the minister who carries out governmental affairs in the field of state finance.
    4.
    Local Governance is the administration of governmental affairs by local governments and local legislative council according to the principle of autonomy and co-administration with the extensive principle of autonomy in the system and principle of the Unitary State of the Republic of Indonesia referred to in the 1945 Constitution of the Republic of Indonesia.
    5.
    Local Government is the head of the region as an element organising the Local Governance leading the administration of governmental affairs under the authority of autonomous regions.
    6.
    Local Legislative Council, hereinafter abbreviated to DPRD, is a local legislative institution domiciled as an element administering the Local Governance.
    7.
    Autonomous Region, hereinafter referred to as Region, is a legal community unit having borders authorised to regulate and manage governmental affairs and the interests of the local community according to their own initiatives based on the people’s aspirations within the Unitary State of the Republic of Indonesia’s system.
    8.
    Governmental Affairs is the power of the government under the President’s authority of which the administration is carried out by state ministries and Local Administrators to protect, serve, empower and prosper the community.
    9.
    Head of the Region is the governor for a provincial Region or the regent for a regency Region or the mayor for a municipal Region.
    10.
    Local-Owned Enterprises, hereinafter abbreviated to BUMD, are business entities whose entire or most of the capital is owned by the Regions.
    11.
    State Finances are all rights and obligations of the state that can be valued in money as well as all matters, either in the form of money or in kind that may be used as state property in respect of the exercise of these rights and obligations.
    12.
    Local Income is money that flows into the Local treasury.
    13.
    Local Revenues are all Local rights recognised as an addition to the value of net worth in the period of the relevant fiscal year.
    14.
    Local Expenditures are all Local liabilities recognised as net worth deductibles in the period of the relevant fiscal year.
    15.
    Financing is any revenue that needs to be repaid and/or expenses that will be reacquired, either in the relevant fiscal year or in the following fiscal years.
    16.
    State Budget, hereinafter abbreviated to APBN, is the state’s government annual financial plan approved by the House of Representatives.
    17.
    Local Government Budget, hereinafter abbreviated to APBD, is the Local annual financial plan stipulated by a Local regulation.
    18.
    Local Regulation, hereinafter referred to as Perda or also referred to by other names are Provincial Regulations and Regency/Municipal Regulations.
    19.
    Head of the Region Regulation, hereinafter referred to as Perkada, are governor regulations and regent/mayor regulations.
    20.
    Local Own-Source Revenues, hereinafter abbreviated to PAD, are Local revenues acquired from local taxes, user charges, proceeds from separate local wealth management and other legitimate local own-source revenues pursuant to statutory provisions.
    21.
    Local Taxes, hereinafter referred to as Taxes, are compulsory contributions to the Regions payable for individuals or entities that are coercive under the Law, without receiving direct compensation and are used for the purposes of the Regions for the greatest prosperity of the people.
    22.
    User Charges, hereinafter referred to as User Charges, are Local levies as payment for certain services or permits specifically provided and/or granted by the Local Governments for the benefit of individuals or entities.
    23.
    Tax Subjects are individuals or entities that may be subject to Taxes.
    24.
    Taxpayer is any individual or entity, comprising a taxpayer, a withholding agent and a collecting agent having tax rights and obligations pursuant to statutory tax provisions.
    25.
    User Charge Subjects are individuals or entities that use/enjoy goods, services and/or licensing services.
    26.
    User Charge Payers are individuals or entities that, pursuant to statutory provisions, are required to pay charges, including certain charge collectors.
    27.
    Entity is a group of people and/or capital that constitutes a unit that either conducts business or not, including limited liability companies, limited partnerships, other companies, state or local-owned enterprises in whatever name and form, firms, joint ventures, cooperatives, pension funds, partnership, alliances, foundations, mass organisations, social and political organisations or any similar organisations, institutions and other forms of entities, including collective investment contracts and permanent establishments.
    28.
    Motor Vehicle Tax, hereinafter abbreviated to PKB, is a Tax on ownership and/or control of motor vehicles.
    29.
    Motor Vehicle Duty, hereinafter abbreviated to BBNKB, is a Tax on a supply of the ownership rights of a motor vehicle as a result of an agreement between two parties or unilateral measures or circumstances occurring due to a purchase and sale, exchange, grants, inheritance or entry into a business entity.
    30.
    Motor Vehicles are all wheeled vehicles and their trailers used on all types of roads or vehicles operated on water that are driven by technical equipment in the form of a motor or other equipment that functions to convert a certain energy resource into the driving force of the motor vehicle concerned.
    31.
    Heavy Equipment Tax, hereinafter abbreviated to PAB, is a Tax on ownership and/or control of heavy equipment.
    32.
    Heavy Equipment is equipment created to assist construction work and other civil engineering work which is heavy if operated by human power, operates using a motor with or without wheels, is not permanently attached and operates in certain areas, including but not limited to construction, plantation, forestry and mining areas.
    33.
    Land and Building Tax Rural-Urban, hereinafter abbreviated to PBB-P2, is a Tax on land and/or buildings owned, controlled and/or utilised by individuals or Entities.
    34.
    Land is the surface of the land which includes land and inland waters.
    35.
    Building is a technical construction that is permanently planted or affixed above the surface of the Land and below the surface of the Land.
    36.
    Sales Value of Taxable Object, hereinafter abbreviated to NJOP, is the average price obtained from a sale and purchase transaction that occurs at arm’s length and if there is no sale and purchase transaction, NJOP is determined through price comparison with other similar objects or the new acquisition value or substitute NJOP.
    37.
    Acquisition Duty on Right to Land and Building, hereinafter abbreviated to BPHTB, is a Tax on an acquisition of the right to land and/or Building.
    38.
    Acquisition of Rights to Land and/or Building is a legal action or event that results in an acquisition of rights to land and/or buildings by individuals or Entities.
    39.
    Rights to Land and/or Building are rights to land, including management rights, along with the Building thereon, referred to in the law in the land and Building sector.
    40.
    Motor Vehicle Fuel Tax, hereinafter abbreviated to PBBKB is a Tax on the use of the fuel of Motor Vehicles and Heavy Equipment.
    41.
    Motor Vehicle Fuel, hereinafter abbreviated to BBKB, is all types of liquid or gaseous fuel used for Motor Vehicles and Heavy Equipment.
    42.
    Certain Goods and Services Tax, hereinafter abbreviated to PBJT are taxes paid by end consumers on the consumption of certain goods and/or services.
    43.
    Certain Goods and Services are certain goods and services that are sold and/or supplied to end consumers.
    44.
    Food and/or Beverages are food and/or beverages that are provided, sold and/or supplied, either directly or indirectly or through orders by restaurants.
    45.
    Restaurant is a facility providing Food and/or Beverages services for a fee.
    46.
    Electricity is power or energy generated by a power station which is distributed for various electrical equipment.
    47.
    Hotel Services are accommodation services that may be complemented by food and beverage services, entertainment activities and/or other facilities.
    48.
    Parking Services are services of the provision or operating off-street parking spaces and/or parking services for vehicles to be placed in the parking area, either those provided in connection with the main business or provided as a business, including the provision of places to store Motor Vehicles.
    49.
    Arts and Entertainment Services are the services of providing or organising all kinds of spectacles, performances, games, dexterity, recreation and/or crowds to be enjoyed.
    50.
    Advertisement Tax is a Tax on the organisation of advertisements.
    51.
    Advertisements are objects, tools, actions or media whose forms and patterns are designed for commercial purposes of introducing, encouraging, promoting or attracting public attention to something.
    52.
    Surface Water Tax, hereinafter abbreviated to PAP, is a Tax on the extraction and/or utilisation of surface water.
    53.
    Surface Water is all water found on the soil surface.
    54.
    Cigarette Tax is a levy on cigarette excise collected by the Government.
    55.
    Ground Water Tax, hereinafter abbreviated to PAT, is a Tax on the extraction and/or utilisation of ground water.
    56.
    Ground Water is water found in the soil or rock layers below the soil surface.
    57.
    Non-Metallic Mineral and Rock Tax is a Tax on activities of extracting non-metallic minerals and rocks from natural sources inside and/or on the surface of land to be utilised.
    58.
    Non-Metallic Minerals and Rocks, hereinafter abbreviated to MBLB, are non-metallic minerals and rocks referred to in statutory provisions in the mineral and coal sector.
    59.
    Swallow's Nest Tax is a Tax on the activities of extracting and/or cultivating swallow’s nests.
    60.
    Swallow is a fauna belonging to the collocalia genus, namely collocalia fuchliap haga, collocalia maxina, collocalia esculanta and collocalia linchi.
    61.
    Surtax is an additional Tax levy according to a certain per centage.
    62.
    Motor Vehicle Tax Surtax, hereinafter referred to as PKB Surtax, is a Surtax imposed by regencies/municipalities on the PKB principal pursuant to statutory provisions.
    63.
    Motor Vehicle Duty Surtax, hereinafter referred to as BBNKB Surtax, is a Surtax imposed by regency/municipalities on the BBNKB principal pursuant to statutory provisions.
    64.
    Non-Metallic Mineral and Rock Tax Surtax, hereinafter referred to as MBLB Tax Surtax, is a Surtax imposed by provinces on the MBLB Tax principal pursuant to statutory provisions.
    65.
    Tax Year is a period of 1 (one) calendar year unless a Taxpayer adopts an accounting year that is different from the calendar year.
    66.
    Public Services are services provided or given by the Local Governments for public interest and benefit and may be enjoyed by individuals or Entities.
    67.
    Business Services are services provided or given by the Local Governments which may be profit-seeking because basically they may also be provided by the private sector.
    68.
    Certain Permits are certain Local Governments activities in the context of granting permits to individuals or Entities which are intended to develop, regulate, control and supervise activities, utilisation of space as well as the use of natural resources, goods, infrastructure, facilities or certain facilities to protect public interests and conserve the environment.
    69.
    Transfers to Regions, hereinafter abbreviated to TKD, are funds sourced from APBN and constitute part of state expenditures allocated and distributed to Regions to be managed by Regions to fund the administration of Governmental Affairs under the authority of Regions.
    70.
    Revenue Sharing Fund, hereinafter abbreviated to DBH, is part of TKD allocated based on a certain per centage of revenues in APBN and certain performance, distributed to producing Regions with the aim of reducing fiscal inequality between the Government and Regions as well as to other non-producing Regions in the context of addressing negative externalities and/or increasing equity in an area.
    71.
    General Allocation Fund, hereinafter abbreviated to DAU, is part of TKD allocated with the aim of reducing inequalities in financial capability and inter- Local public services.
    72.
    Special Allocation Fund, hereinafter abbreviated to DAK, is part of TKD allocated with the aim of funding certain programs, activities and/or policies constituting national priorities and assisting the operation of public services, the use of which has been specified by the Government.
    73.
    Special Autonomy Fund is part of TKD allocated to certain Regions to fund the implementation of special autonomy as stipulated under the Law concerning special autonomy.
    74.
    Privilege Fund for the Special Region of Yogyakarta, hereinafter referred to as Privilege Fund, is part of TKD allocated to support the privileges of the Special Region of Yogyakarta as stipulated in the law concerning the privileges of Yogyakarta.
    75.
    Village Fund is part of TKD intended for villages with the aim of supporting funding for government administration, development, community and society empowerment.
    76.
    Local Finances are all the rights and obligations of Regions in the context of administering Local Governance that can be valued in money as well as all forms of wealth that may be used as Local property in respect of the rights and obligations of these Regions.
    77.
    Budget Surplus, hereinafter referred to as SiLPA, is the difference between the realised budget revenues and expenditures for 1 (one) budget period.
    78.
    Local Debt Financing is any Local income that must be repaid, both in the relevant fiscal year and in the following fiscal years.
    79.
    Local Loans are Local debt financing bound in a loan agreement and not in the form of securities, which results in a Region receiving a sum of money or receiving monetary benefits from other parties, thereby, the Region bears the obligation to repay.
    80.
    Local Government Bonds are securities in the form of debentures issued by the Local Governments.
    81.
    Regional Sharia Bonds are securities based on sharia principles as proof of participation in Regional Sharia Bond assets issued by the Local Governments.
    82.
    Funding Synergy is the synergy of funding sources from APBD and other than APBD in the context of implementing national and/or Local priority programs.
    83.
    Local Endowment Fund is a fund sourced from APBD which is eternal and the funds from its management may be used for Local Expenditures without reducing the principal fund.
     
     
     
     

    Article 2
    The scope of Financial Relations between the Central Government and Local Governance includes:
    a.
    provision of Local Income sources in the form of Taxes and User Charges;
    b.
    management of TKD;
    c.
    management of Local Expenditures;
    d.
    the granting of authority to conduct Local Financing; and
    e.
    implementation of national fiscal policy synergy.
     
     
     
     

    Article 3
    Funding principles for the administration of Governmental Affairs within the framework of Financial Relations between the Central Government and Local Governance include:
    a.
    the administration of Governmental Affairs under the authority of the Regions is funded from and borne by APBD; and
    b.
    the administration of Governmental Affairs under the authority of the Government in Regions is funded from and borne by APBN.
     
     
     
     
    CHAPTER II
    LOCAL TAXES AND USER CHARGES

    Section One
    Taxes

    Paragraph 1
    Types of Taxes
     

    Article 4
    (1)
    Taxes collected by provincial governments consist of:
     
    a.
    PKB;
     
    b.
    BBNKB;
     
    c.
    PAB;
     
    d.
    PBBKB;
     
    e.
    PAP;
     
    f.
    Cigarette Tax; and
     
    g.
    MBLB Tax Surtax.
    (2)
    Taxes collected by regency/municipal governments consist of:
     
    a.
    PBB-P2;
     
    b.
    BPHTB;
     
    c.
    PBJT;
     
    d.
    Advertisement Tax;
     
    e.
    PAT;
     
    f.
    MBLB tax;
     
    g.
    Swallow’s Nest Tax;
     
    h.
    PKB Surtax; and
     
    i.
    BBNKB Surtax.
    (3)
    The Taxes referred to in paragraph (1) and paragraph (2) are collected by Regions at the same level as provincial Regions which are not divided into autonomous regencies/municipalities.
     
     
     
     

    Article 5
    (1)
    The types of Taxes referred to in Article 4 paragraph (1) subparagraph a, subparagraph b, subparagraph c and subparagraph e and Article 4 paragraph (2) subparagraph a, subparagraph d, subparagraph e, subparagraph h and subparagraph i are the types of Taxes collected based on the determination of the Head of the Region.
    (2)
    The types of Taxes referred to in Article 4 paragraph (1) subparagraph d, subparagraph f and subparagraph g and Article 4 paragraph (2) subparagraph b, subparagraph c, subparagraph f and subparagraph g are the types of Taxes collected based on self-calculation by Taxpayers.
    (3)
    Documents used as the collection basis for the types of Taxes referred to in paragraph (1) are, among others, the notice of local tax assessment and notice of tax due.
    (4)
    The documents used as the collection basis for the types of Taxes referred to in paragraph (2) are, among others, the local tax returns.
    (5)
    The local tax returns referred to in paragraph (4) must be filled out correctly and completely and filed by Taxpayers to the Local Governments pursuant to statutory provisions.
     
     
     
     

    Article 6
    (1)
    Local Governments are prohibited from collecting Taxes other than the types of Taxes referred to in Article 4 paragraph (1) and paragraph (2).
    (2)
    The types of Taxes referred to in Article 4 paragraph (1) and paragraph (2) may not be collected in the event that:
     
    a.
    the potential is inadequate; and/or
     
    b.
    the Local Governments establish a non-collection policy.
    (3)
    The types of uncollected Taxes referred to in paragraph (2) are stipulated in the Perda concerning Taxes and User Charges.
     
     
     
     

    Article 7
    (1)
    PKB Object is the ownership and/or control of Motor Vehicles.
    (2)
    PKB Objects referred to in paragraph (1) are Motor Vehicles that must be registered in provinces pursuant to statutory provisions.
    (3)
    Excluded from the PKB Object referred to in paragraph (1) is the ownership and/or control of:
     
    a.
    trains;
     
    b.
    Motor Vehicles that are solely used for state defense and security purposes;
     
    c.
    Motor Vehicles of embassies, consulates, representatives of foreign countries on the principle of reciprocity and international institutions that obtain tax exemption facilities from the Government;
     
    d.
    renewable-energy-based Motor Vehicles; and
     
    e.
    other Motor Vehicles stipulated by a Perda.
     
     
     
     

    Article 8
    (1)
    PKB Subjects are individuals or Entities that own and/or control Motor Vehicles.
    (2)
    PKB Payers are individuals or entities that own Motor Vehicles.
     
     
     
     

    Article 9
    (1)
    PKB base is the product of the multiplication of 2 (two) main elements, namely:
     
    a.
    the sales value of Motor Vehicles; and
     
    b.
    a weight that relatively reflects the level of road damage and/or environmental pollution due to the use of Motor Vehicles.
    (2)
    PKB base, specifically for Motor Vehicles on water, is stipulated based only on the sales value of Motor Vehicles.
    (3)
    The sales value of the Motor Vehicles referred to in paragraph (1) subparagraph a and paragraph (2) is determined based on the general market price of a Motor Vehicle.
    (4)
    The sales value of Motor Vehicles referred to in paragraph (3) is stipulated based on the general market price in the first week of December in the previous Tax Year.
    (5)
    The general market price referred to in paragraph (3) is the average price obtained from various accurate data sources.
    (6)
    In the event that the general market price of a Motor Vehicle is unknown, the sales value of the Motor Vehicle may be determined based on some or all of the following factors:
     
    a.
    the price of Motor Vehicles with the same cylinder capacity and/or power unit;
     
    b.
    the use of Motor Vehicles, either for public or private;
     
    c.
    the price of Motor Vehicles with the same Motor Vehicle brand;
     
    d.
    the price of Motor Vehicles with the same Motor Vehicle manufacture year;
     
    e.
    the price of Motor Vehicles with the Motor Vehicle manufacturer;
     
    f.
    the price of Motor Vehicles with similar Motor Vehicles; and
     
    g.
    the price of Motor Vehicle based on the import declaration document.
    (7)
    The weight referred to in paragraph (1) subparagraph b is expressed in a coefficient, with the following conditions:
     
    a.
    a coefficient equal to 1 (one) means that road damage and/or environmental pollution by the use of the Motor Vehicle is considered to be within the tolerance limit; and
     
    b.
    a coefficient greater than 1 (one) means that road damage and/or environmental pollution by the use of the Motor Vehicle is considered to have exceeded the tolerance limit.
    (8)
    The weight referred to in paragraph (7) is calculated based on the following factors:
     
    a.
    axle load, differentiated based on the number of axles, wheels and weight of the Motor Vehicle;
     
    b.
    the type of Motor Vehicle fuel, differentiated into gasoline, diesel or other types of fuel other than renewable-energy-based fuels; and
     
    c.
    the type, use, year of manufacture and characteristics of the Motor Vehicles engine differentiated based on cylinder capacity.
    (9)
    The PKB Base referred to in paragraph (1) and paragraph (2) is stated in a table stipulated with the following provisions:
     
    a.
    for new Motor Vehicles, it is stipulated by a regulation of the minister administering domestic Governmental Affairs after receiving consideration from the Minister; and
     
    b.
    for other than new Motor Vehicles, it is stipulated by a governor regulation pursuant to the regulation of the minister administering domestic Governmental Affairs taking into account the depreciation of the sales value of the Motor Vehicles and the weight referred to in paragraph (1) subparagraph b.
    (10)
    The PKB Base referred to in paragraph (9) is reviewed no later than every 3 (three) years by taking into account the price index and economic developments.
     
     
     
     

    Article 10
    (1)
    The PKB rates are set as follows:
     
    a.
    for ownership and/or control of the first Motor Vehicle, it is set at a maximum of 1.2% (one point two per cent); and
     
    b.
    for ownership and/or control of the second Motor Vehicle and so forth, it may be set progressively at a maximum of 6% (six per cent).
    (2)
    Specifically for Regions at the same level as provincial Regions that are not divided into autonomous regencies/municipalities, the PKB rates are set as follows:
     
    a.
    for ownership and/or control of the first Motor Vehicle, a maximum of 2% (two per cent); and
     
    b.
    for ownership and/or control of the second Motor Vehicle and so forth, it may be set progressively at a maximum of 10% (ten per cent).
    (3)
    The PKB rate on ownership and/or control of Motor Vehicles used for public transportation, employee transportation, school transportation, ambulance, firefighters, socio-religious, social and religious institutions, the Government and Local Governments, is set at a maximum of 0.5% (zero point five per cent).
    (4)
    Ownership of Motor Vehicles is based on the same name, national identification number and/or address.
    (5)
    The PKB rates referred to in paragraph (1) to paragraph (3) are stipulated by a Perda.
     
     
     
     

    Article 11
    (1)
    The principal amount of PKB payable is calculated by multiplying the PKB base referred to in Article 9 paragraph (9) by the PKB rates referred to in Article 10 paragraph (5).
    (2)
    PKB payable is collected in the Local area where the Motor Vehicles are registered.
    (3)
    PKB is imposed for 12 (twelve) consecutive months since the registration date of the Motor Vehicles.
     
     
     
     
    Paragraph 3
    BBNKB
     

    Article 12
    (1)
    BBNKB Object is the first supply of a Motor Vehicle.
    (2)
    Motor Vehicles referred to in paragraph (1) are Motor Vehicles that are required to be registered in the provincial region pursuant to statutory provisions.
    (3)
    Excluded from BBNKB objects referred to in paragraph (1) are supplies of:
     
    a.
    trains;
     
    b.
    Motor Vehicles that are solely used for state defense and security purposes;
     
    c.
    Motor Vehicles of embassies, consulates, representatives of foreign countries on the principle of reciprocity and international institutions that obtain tax exemption incentives from the Government;
     
    d.
    renewable-energy-based Motor Vehicles; and
     
    e.
    other Motor Vehicles stipulated by a Perda.
    (4)
    Included as supplies of Motor Vehicles referred to in paragraph (1) are the entry of Motor Vehicles from overseas for permanent use in Indonesia, except:
     
    a.
    to be traded;
     
    b.
    to be re-released from the Indonesian customs territory; and
     
    c.
    used for exhibitions, research objects, samples and international sports activities.
    (5)
    The exception referred to in paragraph (4) subparagraph b and subparagraph c does not apply if, for 12 (twelve) consecutive months, the Motor Vehicles are not re-released from the Indonesian customs territory.
     
     
     
     

    Article 13
    (1)
    BBNKB Tax Subjects are individuals or Entities that receive supplies of Motor Vehicles.
    (2)
    BBNKB Taxpayers are individuals or entities that receive supplies of Motor Vehicles.
     
     
     
     

    Article 14
    BBNKB Base is the sales value of Motor Vehicles stipulated in the regulation of the minister administering domestic Governmental Affairs and the governor regulation referred to in Article 9 paragraph (9).
     
     
     
     

    Article 15
    (1)
    BBNKB rate is set at a maximum of 12% (twelve per cent).
    (2)
    Specifically for Regions at the same level as provincial Regions that are not divided into autonomous regencies/municipalities, BBNKB rate is set at a maximum of 20% (twenty per cent).
    (3)
    The BBNKB rates referred to in paragraph (1) and paragraph (2) are stipulated by a Perda.
     
     
     
     

    Article 16
    (1)
    The principal amount of BBNKB payable is calculated by multiplying the BBNKB Base referred to in Article 14 by the BBNKB rates referred to in Article 15 paragraph (3).
    (2)
    BBNKB payable is collected in the Local area where the Motor Vehicles are registered.
    (3)
    BBNKB payment is made prior to the registration of Motor Vehicles.
    (4)
    Proof of BBNKB payment constitutes a requirement in the registration of new Motor Vehicles pursuant to statutory provisions.
     
     
     
     
    Paragraph 4
    PAB
     

    Article 17
    (1)
    PAB Object is ownership and/or control of Heavy Equipment.
    (2)
    Excluded from the PAB object referred to in paragraph (1) is ownership and/or control of:
     
    a.
    Heavy Equipment owned and/or controlled by the Government, Local Governments and the Indonesian National Armed Forces/Indonesian National Police;
     
    b.
    Heavy Equipment owned and/or controlled by embassies, consulates, representatives of foreign countries on the principle of reciprocity and international institutions that obtain tax exemption incentives from the Government; and
     
    c.
    ownership and/or control of other Heavy Equipment as stipulated in a Perda.
     
     
     
     

    Article 18
    (1)
    PAB Subjects are individuals or Entities that own and/or control Heavy Equipment.
    (2)
    PAB Payers are individuals or Entities that own and/or control Heavy Equipment.
     
     
     
     

    Article 19
    (1)
    PAB Base is the sales value of Heavy Equipment.
    (2)
    The sales value referred to in paragraph (1) is determined based on the general market average price of the Heavy Equipment concerned.
    (3)
    The general market average price referred to in paragraph (2) is set based on the average price obtained from various accurate data sources in the first week of December in the previous Tax Year.
    (4)
    Determination of the PAB base referred to in paragraph (1) is regulated in a regulation of the minister administering domestic Governmental Affairs after receiving consideration from the Minister.
    (5)
    The PAB Base referred to in paragraph (1) shall be reviewed no later than every 3 (three) years by taking into account the price index and economic developments.
     
     
     
     

    Article 20
    (1)
    PAB rate is set at a maximum of 0.2% (zero point two per cent).
    (2)
    The PAB rate referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 21
    (1)
    The principal amount of PAB payable is calculated by multiplying the PAB base referred to in Article 19 paragraph (4) by the PAB rate referred to in Article 20 paragraph (2).
    (2)
    PAB payable is collected in the Local area where the Heavy Equipment is controlled.
     
     
     
     

    Article 22
    (1)
    PAB on the ownership and/or control of Heavy Equipment is payable since the Taxpayer is legally recognised to own and/or control the Heavy Equipment.
    (2)
    PAB on the ownership and/or control of Heavy Equipment is imposed for every consecutive period of 12 (twelve) months.
    (3)
    PAB on the ownership and/or control of Heavy Equipment is paid in a lump sum in advance.
    (4)
    In the event of a force majeure which results in the use of Heavy Equipment to not yet reach 12 (twelve) months as referred to in paragraph (2), the Taxpayer may apply for a refund of PAB that has been paid for the fraction of the period that has not elapsed.
    (5)
    Further provisions on the procedures for refunds referred to in paragraph (4) are regulated by a governor regulation.
     
     
     
     
    Paragraph 5
    PBBKB
     

    Article 23
    PBBKB objects are supplies of BBKB by BBKB providers to consumers or users of Motor Vehicles.
     
     
     
     

    Article 24
    (1)
    PBBKB Tax Subjects are BBKB consumers.
    (2)
    PBBKB Taxpayers are individuals or Entities providing BBKB that supply BBKB.
    (3)
    PBBKB is collected by BBKB providers.
    (4)
    BBKB providers referred to in Article 23 are manufacturers and/or importers of Motor Vehicle fuel, either for sale or personal use.
     

    Article 25
    PBBKB Base is the sales value of BBKB before being subject to value added tax.
     
     
     
     

    Article 26
    (1)
    PBBKB rate is set at a maximum of 10% (ten per cent).
    (2)
    PBBKB rate for public vehicle fuel may specifically be set at a maximum of 50% (fifty per cent) of PBBKB rates for private vehicles.
    (3)
    For certain types of BBKB, the Government may adjust the PBBKB rates that have been set in the Perda in the context of price stabilisation.
    (4)
    The adjustment of PBBKB rate referred to in paragraph (3) is stipulated by a Presidential Regulation.
    (5)
    The PBBKB rates referred to in paragraph (1) and paragraph (2) are stipulated by a Perda.
     
     
     
     

    Article 27
    The principal amount of PBBKB payable is calculated by multiplying the PBBKB base referred to in Article 25 by the PBBKB rate referred to in Article 26.
     
     
     
     
    Paragraph 6
    PAP
     

    Article 28
    (1)
    PAP object is the extraction and/or utilisation of Surface Water.
    (2)
    Excluded from PAP objects are the extraction and/or utilisation of:
     
    a.
    basic household needs;
     
    b.
    people’s agricultural irrigation;
     
    c.
    people’s fisheries;
     
    d.
    religious needs;
     
    e.
    activities that extract and utilise sea water, both in the ocean and/or on land (brackish water); and
     
    f.
    other activities stipulated in the Perda, with due regard to environmental sustainability and statutory provisions.
     
     
     
     

    Article 29
    (1)
    PAP subjects are individuals or Entities that perform extraction and/or utilisation of Surface Water.
    (2)
    PAP Payers are individuals or Entities that perform extraction and/or utilisation of Surface Water.
     
     
     
     

    Article 30
    (1)
    PAP Base is the acquisition value of Surface Water.
    (2)
    The acquisition value of Surface Water referred to in paragraph (1) is the product of the multiplication of the base price of Surface Water and the weight of Surface Water.
    (3)
    The base price of Surface Water is set in rupiah based on the cost of maintaining and controlling Surface Water resources.
    (4)
    The weight of Surface Water referred to in paragraph (2) is expressed in a coefficient that is at least based on the following factors:
     
    a.
    the location of water extraction;
     
    b.
    water volume; and
     
    c.
    the management authority of water resources.
    (5)
    The amount of the acquisition value of Surface Water referred to in paragraph (1) is stipulated by a governor regulation.
    (6)
    Further provisions on the base price of Surface Water and the weight of Surface Water are stipulated by the minister administering Governmental Affairs in the field of public work after receiving consideration from the Minister.
     
     
     
     

    Article 31
    (1)
    PAP rate is set at a maximum of 10% (ten per cent).
    (2)
    The PAP rate referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 32
    (1)
    The principal amount of PAP payable is calculated by multiplying the PAP base referred to in Article 30 paragraph (1) by the PAP rate referred to in Article 31 paragraph (2).
    (2)
    PAP payable is collected in the Local area where Surface Water is located.
     
     
     
     
    Paragraph 7
    Cigarette Tax
     

    Article 33
    (1)
    Cigarette Tax object is cigarette consumption.
    (2)
    The cigarettes referred to in paragraph (1) include cigarettes, cigars, corn husk cigarettes and other forms of cigarettes subject to cigarette excise.
    (3)
    Excluded from the Cigarette Tax objects referred to in paragraph (1) are cigarettes that are not subject to cigarette excise tax pursuant to statutory provisions in the excise sector.
     
     
     
     

    Article 34
    (1)
    Cigarette Tax Subjects are cigarette consumers.
    (2)
    Cigarette Taxpayers are cigarette manufacturers/producers and importers that hold permits in the form of an excisable goods entrepreneur identification number.
    (3)
    Cigarette Tax is collected by a Government agency authorised to concurrently collect excise with the collection of cigarette excise.
    (4)
    Cigarette Tax collected by the Government agency referred to in paragraph (3) shall be remitted into the general treasury account of the provincial region in proportion to the total population.
    (5)
    Further provisions on procedures for the collection and remittance of Cigarette Tax are regulated by a Ministerial Regulation.
     
     
     
     

    Article 35
    Cigarette Tax Base is the excise stipulated by the Government on cigarettes.
     
     
     
     

    Article 36
    Cigarette Tax rate is set at 10% (ten per cent) of cigarette excise.
     
     
     
     

    Article 37
    The principal amount of Cigarette Tax payable is calculated by multiplying the Cigarette Tax base referred to in Article 35 by the Cigarette Tax rate referred to in Article 36.
     
     
     
     
    Paragraph 8
    PBB-P2
     

    Article 38
    (1)
    PBB-P2 objects are Land and/or Buildings that are owned, controlled and/or utilised by individuals or Entities, except for areas used for plantation, forestry and mining businesses.
    (2)
    The Land referred to in paragraph (1) includes the surface of Land resulting from reclamation or backfill.
    (3)
    Excluded from PBB-P2 objects referred to in paragraph (1) are ownership, control and/or utilisation of:
     
    a.
    Land and/or office Buildings of the Government, Local Governance offices and other state administration offices which are recorded as state property or Local property;
     
    b.
    Land and/or Buildings that are used solely to serve the public interest in the religion, social care, health, education and national culture sectors, which are not intended to seek profit;
     
    c.
    Land and/or Buildings that are solely used for cemeteries, ancient relics or the like;
     
    d.
    Land constituting protected forests, nature reserve forests, tourism forests, national parks, grasing land controlled by the village and state land that has not been encumbered with a right;
     
    e.
    Land and/or Buildings used by diplomatic representatives and consulates based on the principle of reciprocal treatment;
     
    f.
    Land and/or Buildings used by bodies or representatives of international institutions as regulated by a Ministerial Regulation;
     
    g.
    Land and/or Buildings for railroads, Mass Rapid Transit, Light Rail Transit or the like;
     
    h.
    Land and/or other residential Buildings based on certain NJOP stipulated by the Head of the Region; and
     
    i.
    land and/or buildings on which land and building tax is collected by the Government.
     
     
     
     

    Article 39
    (1)
    PBB-P2 Tax Subjects are individuals or Entities that, in fact, hold the right to Land and/or obtain benefits from the Land and/or own, control and/or obtain benefits from Buildings.
    (2)
    PBB-P2 Taxpayers are individuals or Entities that, in fact, hold the right to Land and/or obtain benefits from the Land and/or own, control and/or obtain benefits from Buildings.
     
     
     
     

    Article 40
    (1)
    PBB-P2 Base is NJOP.
    (2)
    NJOP referred to in paragraph (1) is set based on the PBB-P2 assessment process.
    (3)
    Non-taxable NJOP is set at a minimum of IDR10,000,000.00 (ten million rupiah) for each Taxpayer.
    (4)
    In the event that a Taxpayer owns or controls more than one PBB-P2 object in a regency/municipal area, the non-taxable NJOP referred to in paragraph (3) is only granted on one of the PBB-P2 objects for each Tax Year.
    (5)
    NJOP used for the calculation of PBB-P2 is set at a minimum of 20% (twenty per cent) and a maximum of 100% (one hundred per cent) of NJOP after deducted by the non-taxable NJOP referred to in paragraph (3).
    (6)
    NJOP referred to in paragraph (1) is set every 3 (three) years, except for certain taxable objects which may be set annually according to the development of the area.
    (7)
    The amount of NJOP is set by the Head of the Region.
    (8)
    Further provisions on the assessment of PBB-P2 referred to in paragraph (2) are regulated by a Ministerial Regulation.
     
     
     
     

    Article 41
    (1)
    PBB-P2 rate is set at a maximum of 0.5% (zero point five per cent).
    (2)
    The PBB-P2 rate referred to in paragraph (1) in the form of land for food and livestock production is set lower than the rate for other land.
    (3)
    The PBB-P2 rate referred to in paragraph (1) and paragraph (2) shall be stipulated by a Perda.
     
     
     
     

    Article 42
    The principal amount of PBB-P2 payable is calculated by multiplying the PBB-P2 base referred to in Article 40 paragraph (5) by the PBB-P2 rate referred to in Article 41 paragraph (3).
     
     
     
     

    Article 43
    (1)
    PBB-P2 Tax Year is a period of 1 (one) calendar year.
    (2)
    The decisive time to calculate PBB-P2 payable complies with the condition of the PBB-P2 object on 1 January.
    (3)
    The place where PBB-P2 becomes payable is in the Local area which includes the location of the PBB-P2 object.
     
     
     
     
    Paragraph 9
    Acquisition Duty on Rights to Land and/or Buildings (BPHTB)
     

    Article 44
    (1)
    BPHTB object is the Acquisition of Rights to Land and/or Buildings.
    (2)
    The Acquisition of Rights to Land and/or Buildings referred to in paragraph (1) includes:
     
    a.
    transfer of rights due to:
     
     
    1.
    buying and selling;
     
     
    2.
    exchange;
     
     
    3.
    grants;
     
     
    4.
    bequest;
     
     
    5.
    inheritance;
     
     
    6.
    entry into a company or other legal entities;
     
     
    7.
    separation of rights resulting in the transfer;
     
     
    8.
    appointment of the buyer in an auction;
     
     
    9.
    implementation of the judge’s decision which has permanent legal force;
     
     
    10.
    a merger;
     
     
    11.
    a consolidation;
     
     
    12.
    a spin-off; or
     
     
    13.
    a gift; and
     
    b.
    the granting of new rights due to:
     
     
    1.
    continuation of the waiver of rights; or
     
     
    2.
    beyond the waiver of rights.
    (3)
    Rights to Land and/or Buildings referred to in paragraph (1) include:
     
    a.
    ownership rights;
     
    b.
    right to cultivate;
     
    c.
    right to build;
     
    d.
    right to use;
     
    e.
    ownership rights to flat units; and
     
    f.
    management rights.
    (4)
    Excluded from BPHTB objects are the Acquisition of Rights to Land and/or Buildings:
     
    a.
    for Government offices, Local Governance, state administrators and other state institutions which are recorded as state property or Local property;
     
    b.
    by the state for the administration of government and/or for the implementation of development for the public interest;
     
    c.
    for bodies or representatives of international institutions provided that they do not conduct a business or carry out other activities outside the functions and duties of the bodies or representative of the said institutions as regulated by a Ministerial Regulation;
     
    d.
    for diplomatic representatives and consulates based on the principle of reciprocal treatment;
     
    e.
    by individuals or Entities due to a conversion of rights or due to other legal actions in the absence of name change;
     
    f.
    by individuals or Entities due to waqf;
     
    g.
    by individuals or Entities for worship purposes; and
     
    h.
    for low-income people pursuant to statutory provisions.
     
     
     
     

    Article 45
    (1)
    BPHTB Tax Subjects are individuals or Entities that acquire Rights to Land and/or Buildings.
    (2)
    BPHTB Taxpayers are individuals or entities that acquire Rights to Land and/or Buildings.
     
     
     
     

    Article 46
    (1)
    BPHTB Base is the acquisition value of a taxable object.
    (2)
    The acquisition value of a taxable object referred to in paragraph (1) is set as follows:
     
    a.
    the transaction price for buying and selling;
     
    b.
    the market value for the exchange, grant, bequest, inheritance, entry into a company or other legal entities, separation of rights resulting in the transfer, transfer of rights due to the implementation of a judge’s decision that has permanent legal force, the granting of new rights to land as a continuation of the waiver of rights, the granting of new rights to land beyond the waiver of rights, merger, consolidation, spin-off and gifts; and
     
    c.
    the transaction price listed in the auction report for the appointment of the buyer in an auction.
    (3)
    In the event that the acquisition value of a taxable object referred to in paragraph (2) is unknown or lower than the NJOP used in the imposition of land and building tax in the year in which the acquisition occurs, the BPHTB base used is the NJOP used in the imposition of land and building tax in the year the acquisition occurs.
    (4)
    In determining the amount of BPHTB payable, the Local Governments shall stipulate the acquisition value of a non-taxable object as a deductible of the BPHTB base referred to in paragraph (1).
    (5)
    The amount of the acquisition value of a non-taxable object is set at a minimum of IDR80,000,000.00 (eighty million rupiah) for the acquisition of the Taxpayer’s first right in the Region where BPHTB is payable.
    (6)
    In the event of an acquisition of rights due to a bequest or inheritance as referred to in Article 44 paragraph (2) subparagraph a number 4 and number 5 received by an individual with a family relationship by blood in a vertical lineage of one degree with the bequestor or testator, including the husband/wife, the acquisition value of the non-taxable object is set to be a minimum of IDR300,000,000.00 (three hundred million rupiah).
    (7)
    For the acquisition of rights due to a certain bequest or inheritance, the Local Governments may stipulate a higher acquisition value of a non-taxable tax object than the acquisition value of the non-taxable object referred to in paragraph (6).
    (8)
    The acquisition value of non-taxable objects referred to in paragraph (5) and paragraph (6) is stipulated by a Perda.
     
     
     
     

    Article 47
    (1)
    BPHTB rate is set at a maximum of 5% (five per cent).
    (2)
    The BPHTB rate referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 48
    (1)
    The principal amount of BPHTB payable is calculated by multiplying the BPHTB base referred to in Article 46 paragraph (1) after deducted with the acquisition value of the non-taxable objects referred to in Article 46 paragraph (5) or paragraph (6), by the BPHTB rate referred to in Article 47 paragraph (2).
    (2)
    BPHTB payable is collected in the Local area where the land and/or Buildings are located.
     
     
     
     

    Article 49
    When BPHTB becomes payable is determined:
    a.
    on the date of the sale and purchase agreement for a sale and purchase is prepared and signed;
    b.
    on the date the deed for the exchange, grant, bequest, entry into a company or other legal entities, separation of rights resulting in a transfer, merger, consolidation, spin-off and/or gift is prepared and signed;
    c.
    on the date the heir/heiress or the heir/heiress’s attorney registers the transfer of rights to the land office for an inheritance;
    d.
    on the date of the court decision which has permanent legal force for the judge’s decision;
    e.
    on the issuance date of the decision letter on the granting of rights for the granting of new rights to land as a continuation of the waiver of rights;
    f.
    on the issuance date of the decision letter on the granting of rights for the granting of new rights beyond the waiver of rights; or
    g.
    on the date of appointment of the auction winner for an auction.
     
     
     
     
    Paragraph 10
    PBJT
     

    Article 50
    PBJT objects are sales, supplies and/or consumption of certain goods and services which include:
    a.
    Food and/or Beverages;
    b.
    Electricity;
    c.
    Hotel Services;
    d.
    Parking Services; and
    e.
    Arts and Entertainment Services.
     
     
     
     

    Article 51
    (1)
    Sales and/or supplies of Food and/or Beverages referred to in Article 50 subparagraph a include Food and/or Beverages provided by:
     
    a.
    Restaurants that at least provide the serving of Food and/or Beverages services in the form of tables, chairs and/or utensils for eating and drinking;
     
    b.
    catering service providers that conduct the following:
     
     
    1.
    the process of providing raw materials and work-in-process, manufacture, storage and serving based on orders;
     
     
    2.
    serving on the premises desired by the customer and different from the location where the manufacturing and storage processes are carried out; and
     
     
    3.
    serving is carried out with or without utensils and staff.
    (2)
    Excluded from PBJT objects referred to in paragraph (1) are supplies of Food and/or Beverages:
     
    a.
    with business turnover not exceeding a certain threshold stipulated under a Perda;
     
    b.
    carried out by supermarkets and the like that do not solely sell Food and/or Beverages;
     
    c.
    carried out by factories of Food and/or Beverages; or
     
    d.
    provided by facility providers whose main business is to provide lounge services at airports.
     
     
     
     

    Article 52
    (1)
    The consumption of Electricity referred to in Article 50 subparagraph b is the use of Electricity by end users.
    (2)
    Excluded from the consumption of Electricity referred to in paragraph (1), include:
     
    a.
    the consumption of Electricity by Government agencies, Local Governments and other state administrators;
     
    b.
    the consumption of Electricity in places used by embassies, consulates and foreign representatives based on the principle of reciprocity;
     
    c.
    the consumption of Electricity in houses of worship, nursing homes, orphanages and other similar social institutions;
     
    d.
    the consumption of self-generated Electricity with a certain capacity that does not require a permit from the relevant technical agency; and
     
    e.
    other consumption of Electricity as regulated by a Perda.
     
     
     
     

    Article 53
    (1)
    Hotel Services referred to in Article 50 subparagraph c include the provision of accommodation services and supporting facilities as well as the rental of meeting rooms by hotel service providers, such as:
     
    a.
    hotels;
     
    b.
    hostels;
     
    c.
    villas;
     
    d.
    tourist lodges;
     
    e.
    motels;
     
    f.
    budget hotels;
     
    g.
    tourist hostels;
     
    h.
    lodgings;
     
    i.
    inns/guest houses/bungalows/resorts/cottages;
     
    j.
    private residences functioned as hotels; and
     
    k.
    glamping.
    (2)
    Excluded from Hotel Services referred to in paragraph (1) include:
     
    a.
    dormitory housing services organised by the Government or Local Governments;
     
    b.
    housing services in hospitals, nurse dormitories, nursing homes, orphanages and other similar social institutions;
     
    c.
    housing services in educational centres or religious activities;
     
    d.
    travel agency or travel services; and
     
    e.
    room rental services to be operated at hotels.
     
     
     
     

    Article 54
    (1)
    Parking Services referred to in Article 50 subparagraph d include:
     
    a.
    the provision or operation of parking spaces; and/or
     
    b.
    valet parking services.
    (2)
    Excluded from parking space services referred to in paragraph (1) include:
     
    a.
    parking space services organised by the Government and Local Governments;
     
    b.
    parking space services organised by offices that are solely used for their own employees;
     
    c.
    parking space services organised by embassies, consulates and representatives of foreign countries on the principle of reciprocity; and
     
    d.
    other parking services as regulated by a Perda.
     
     
     
     

    Article 55
    (1)
    Arts and Entertainment Services referred to in Article 50 subparagraph e include:
     
    a.
    films or other forms of audio-visual spectacle shown live at certain locations;
     
    b.
    performing arts,concerts, dance performances and/or fashion shows;
     
    c.
    beauty contests;
     
    d.
    bodybuilding contests;
     
    e.
    exhibitions;
     
    f.
    circus, acrobatics and magic shows;
     
    g.
    horse racing and automobile racing;
     
    h.
    carnival games;
     
    i.
    sports games using the place/space and/or equipment and supplies for sports and fitness;
     
    j.
    recreational water rides, ecological rides, educational rides, cultural rides, snow rides, game rides, fishing, agro-tourism and zoos;
     
    k.
    massage and reflexology parlours; and
     
    l.
    discotheques, karaoke, nightclubs, bars and saunas or spas.
    (2)
    Excluded from Arts and Entertainment Services referred to in paragraph (1) are Arts and Entertainment Services that are solely for:
     
    a.
    free-of-charge promotion of traditional culture;
     
    b.
    free-of-charge community service activities; and/or
     
    c.
    other forms of arts and entertainment as regulated by a Perda.
     
     
     
     

    Article 56
    (1)
    PBJT Tax Subjects are consumers of certain goods and services.
    (2)
    PBJT Taxpayers are individuals or Entities conducting sales, supplies and/or consumption of certain goods and services.
     
     
     
     

    Article 57
    (1)
    PBJT Base is the amount paid by consumers of certain goods or services.
    (2)
    In the event that there is no payment as referred to in paragraph (1), PBJT base is calculated based on the sales price of similar goods and services applicable in the Local area concerned.
     
     
     
     

    Article 58
    (1)
    PBJT rate is set at a maximum of 10% (ten per cent).
    (2)
    PBJT rates for entertainment services at discotheques, karaoke, nightclubs, bars and saunas or spas are specifically set at a minimum of 40% (forty per cent) and a maximum of 75% (seventy-five per cent).
    (3)
    Specific PBJT rates on Electricity for:
     
    a.
    the consumption of Electricity from other sources by industries, oil and natural gas mining, is set at a maximum of 3% (three per cent); and
     
    b.
    the consumption of self-generated Electricity is set at a maximum of 1.5% (one point five per cent).
    (4)
    PBJT rates referred to in paragraph (1), paragraph (2) and paragraph (3) are stipulated by a Perda.
     
     
     
     

    Article 59
    (1)
    The principal amount of PBJT payable is calculated by multiplying the PBJT base referred to in Article 57 by the PBJT rate referred to in Article 58 paragraph (4).
    (2)
    PBJT payable is collected in the Local area where the sales, supplies and/or consumption of certain goods and services are carried out.
    (3)
    When PBJT becomes payable is calculated since the payment/supply/consumption of certain goods and services is carried out.
     
     
     
     
    Paragraph 11
    Advertisement Tax
     

    Article 60
    (1)
    Advertisement Tax Objects are all organisation of Advertisement.
    (2)
    Advertisement Tax Objects referred to in paragraph (1) include:
     
    a.
    signboard/billboard/videotron/megatron Advertisements;
     
    b.
    fabric banner Advertisements;
     
    c.
    sticker Advertisements;
     
    d.
    flyer Advertisements;
     
    e.
    transit media Advertisements, including on vehicles;
     
    f.
    aerial Advertisements;
     
    g.
    waterway Advertisements;
     
    h.
    cinema/slide Advertisements; and
     
    i.
    demonstration Advertisements.
    (3)
    Excluded from Advertisement Tax objects are:
     
    a.
    the organisation of Advertisements through the internet, television, radio, daily news, weekly news, monthly news and the like;
     
    b.
    product labels/brands attached to the traded goods, which function to distinguish them from other similar products;
     
    c.
    business or profession identifier that is attached to a building and/or within the area of the place of business or profession, the type, size, shape and material of the Advertisements shall be regulated in a Perkada by referring to the provisions on business or profession identifier;
     
    d.
    Advertisements organised by the Government or Local Governments;
     
    e.
    Advertisements organised in the context of political, social and religious activities that are not accompanied by commercial advertisements; and
     
    f.
    other Advertisements as regulated by a Perda.
     
     
     
     

    Article 61
    (1)
    Advertisement Tax Subjects are individuals or Entities that use Advertisements.
    (2)
    Advertisement Taxpayers are individuals or Entities that organise Advertisements.
     
     
     
     

    Article 62
    (1)
    Advertisement Tax Base is the rental value of Advertisements.
    (2)
    In the event that an Advertisement is organised by a third party, the rental value of the Advertisement referred to in paragraph (1) is set based on the contract value of the Advertisement.
    (3)
    In the event that the Advertisement is self-organised, the rental value of the Advertisement referred to in paragraph (1) is calculated by taking into account the factors of type, materials, placement location, time of presentation, duration of organisation, number and size of the Advertisement media.
    (4)
    In the event that the rental value of an Advertisement referred to in paragraph (2) is not known and/or deemed unreasonable, the rental value of the Advertisement is set using the factors referred to in paragraph (3).
    (5)
    Calculation of the rental value of the Advertisements referred to in paragraph (3) is stipulated by a Perkada.
     
     
     
     

    Article 63
    (1)
    Advertising Tax rate is set at a maximum of 25% (twenty-five per cent).
    (2)
    The Advertising Tax rate referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 64
    (1)
    The principal amount of Advertisement Tax payable is calculated by multiplying the Advertisement Tax base referred to in Article 62 paragraph (1) by the Advertising Tax rate referred to in Article 63 paragraph (2).
    (2)
    Advertising Tax payable is collected in the are of the Region where the Advertisement is organised.
    (3)
    Specifically for the transit media Advertisements referred to in Article 60 paragraph (2) subparagraph e, Advertisement Tax payable is collected in the Local area where the Advertisement organiser’s business is registered.
     
     
     
     
    Paragraph 12
    PAT
     

    Article 65
    (1)
    PAT Objects are the extraction and/or utilisation of Ground Water.
    (2)
    Excluded from PAT object is the extraction for:
     
    a.
    basic household needs;
     
    b.
    people’s agricultural irrigation;
     
    c.
    people’s fisheries;
     
    d.
    people’s farms;
     
    e.
    religious needs; and
     
    f.
    other activities as regulated by a Perda.
     
     
     
     

    Article 66
    (1)
    PAT Subjects are individuals or Entities that perform extraction and/or utilisation of Ground Water.
    (2)
    PAT Payers are individuals or Entities that perform extraction and/or utilisation of Ground Water.
     
     
     
     

    Article 67
    (1)
    PAT base is the acquisition value of Ground Water.
    (2)
    The acquisition value of Ground Water referred to in paragraph (1) is the product of the multiplication of the price of raw water and the weight of Ground Water.
    (3)
    The price of raw water referred to in paragraph (2) is set based on the cost of maintaining and controlling the Ground Water resource.
    (4)
    The weight of Ground Water referred to in paragraph (2) is expressed in a coefficient based on the following factors:
     
    a.
    the type of water source;
     
    b.
    the location of water source;
     
    c.
    the purpose of extraction and/or utilisation of water;
     
    d.
    the volume of extracted and/or utilised water;
     
    e.
    water quality; and
     
    f.
    the level of environmental damage caused by the extraction and/or utilisation of water.
     
     
     
     

    Article 68
    (1)
    Further provisions on the stipulation of the acquisition value of Ground Water referred to in Article 67 paragraph (1) are regulated by a governor regulation by referring to the regulation stipulated by the minister administering Governmental Affairs in the energy and mineral resource sector.
    (2)
    The regulation stipulated by the minister referred to in paragraph (1) is formulated by taking into account the ease of investment policy and enacted after receiving consideration from the Minister.
     
     
     
     

    Article 69
    (1)
    PAT rate is set at a maximum of 20% (twenty per cent).
    (2)
    The PAT rate referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 70
    (1)
    The principal amount of PAT payable is calculated by multiplying the PAT base referred to in Article 67 paragraph (1) by the PAT rate referred to in Article 69 paragraph (2).
    (2)
    PAT payable is collected in the Local area where the extraction and/or utilisation of Ground Water is located.
    (3)
    When PAT becomes payable is calculated since the extraction and/or utilisation of Ground Water.
     
     
     
     
    Paragraph 13
    MBLB Tax
     

    Article 71
    (1)
    MBLB Tax Objects are MBLB extraction activities that include:
     
    a.
    asbestos;
     
    b.
    slates;
     
    c.
    semi-precious stones;
     
    d.
    limestones;
     
    e.
    pumice;
     
    f.
    gemstones;
     
    g.
    bentonite;
     
    h.
    dolomite;
     
    i.
    feldspar;
     
    j.
    rock salt (halite);
     
    k.
    graphite;
     
    l.
    granite/andesite;
     
    m.
    gypsum;
     
    n.
    calcite;
     
    o.
    kaolin;
     
    p.
    leucite;
     
    q.
    magnesite;
     
    r.
    mica;
     
    s.
    marble;
     
    t.
    nitrate;
     
    u.
    obsidian;
     
    v.
    ocher;
     
    w.
    sand and gravel;
     
    x.
    quartz sand;
     
    y.
    pearlite;
     
    z.
    phosphate;
     
    aa.
    talc;
     
    bb.
    fullers earth;
     
    cc.
    diatomaceous earth;
     
    dd.
    clay;
     
    ee.
    alum;
     
    ff.
    trass;
     
    gg.
    jarosite;
     
    hh.
    zeolite;
     
    ii.
    basalt;
     
    jj.
    trachyte;
     
    kk.
    sulphur;
     
    ll.
    accessory MBLB in mineral mining; and
     
    mm.
    other MBLB pursuant to statutory provisions.
    (2)
    Excluded from the MBLB Tax objects referred to in paragraph (1) include MBLB extraction:
     
    a.
    for household purposes and not for sale/transfer;
     
    b.
    for the purpose of erecting electricity/telephone poles, planting cables, planting pipes and the like that do not change the function of the soil surface; and
     
    c.
    for other purposes as stipulated by a Perda.
     
     
     
     

    Article 72
    (1)
    MBLB Tax Subjects are individuals or Entities that extract MBLB.
    (2)
    MBLB Taxpayers are individuals or Entities that extract MBLB.
     
     
     
     

    Article 73
    (1)
    MBLB Tax Base is the sales value of the proceeds from MBLB extraction.
    (2)
    The sales value referred to in paragraph (1) is calculated based on the multiplication of the volume/tonnage of MBLB extraction and the benchmark price for each type of MBLB.
    (3)
    The benchmark price referred to in paragraph (2) is calculated based on the average sales price of each type of MBLB at the mine mouth applicable in the Local area concerned.
    (4)
    The benchmark price referred to in paragraph (3) is set pursuant to statutory provisions in the mineral and coal mining sector.
     
     
     
     

    Article 74
    (1)
    MBLB Tax rate is set at a maximum of 20% (twenty per cent).
    (2)
    Specifically for Regions at the same level as provincial Regions which are not divided into autonomous regency/city regions, MBLB Tax rate is set at a maximum of 25% (twenty-five per cent).
    (3)
    The MBLB Tax rate referred to in paragraph (1) and paragraph (2) is stipulated by a Perda.
     
     
     
     

    Article 75
    (1)
    The principal amount of MBLB Tax payable is calculated by multiplying the MBLB Tax base referred to in Article 73 paragraph (1) by the MBLB Tax rate referred to in Article 74 paragraph (3).
    (2)
    MBLB Tax payable is collected in the Local area where MBLB is extracted.
     
     
     
     
    Paragraph 14
    Swallow’s Nest Tax
     

    Article 76
    (1)
    Swallow’s Nest Tax objects are extraction and/or cultivation of Swallow’s nests.
    (2)
    Excluded from the Swallow’s Nest Tax objects referred to in paragraph (1) are:
     
    a.
    the extraction of Swallow’s nest that has been subject to non-tax state revenues; and
     
    b.
    other Swallow’s nest extraction and/or cultivation activities as stipulated by a Perda.
     
     
     
     

    Article 77
    (1)
    Swallow’s Nest Tax Subject are individuals or Entities that extract and/or cultivate Swallow’s nests.
    (2)
    Swallow’s Nest Taxpayers are individuals or Entities that extract and/or cultivate Swallow’s nests.
     
     
     
     

    Article 78
    (1)
    Swallow’s Nest Tax base is the sales value of Swallow’s nests.
    (2)
    The sales value of the swallow bird’s nests referred to in paragraph (1) is calculated based on the multiplication of the general market price of the Swallow’s nests applicable in the Region concerned and the volume of the Swallow’s nests.
     
     
     
     

    Article 79
    (1)
    Swallow’s Nest Tax rate is set at a maximum of 10% (ten per cent).
    (2)
    Swallow’s Nest Tax rate is stipulated by a Perda.
     
     
     
     

    Article 80
    The principal amount of Swallow’s Nest Tax payable is calculated by multiplying the Swallow’s Nest Tax base referred to in Article 78 paragraph (1) by the Swallow’s Nest Tax rate referred to in Article 79 paragraph (2).
     
     
     
     
    Paragraph 15
    Surtax
     

    Article 81
    Surtax is imposed on the Tax payable of:
    a.
    PKB;
    b.
    BBNKB; and
    c.
    MBLB Tax.
     
     
     
     

    Article 82
    Taxpayers for the Surtax referred to in Article 81 are the Taxpayers for the following types of Taxes:
    a.
    PKB;
    b.
    BBNKB; and
    c.
    MBLB Tax.
     
     
     
     

    Article 83
    (1)
    Surtax rates are set as follows:
     
    a.
    PKB Surtax of 66% (sixty-six per cent);
     
    b.
    BBNKB Surtax of 66% (sixty-six per cent); and
     
    c.
    MBLB Tax Surtax of 25% (twenty-five per cent),
     
    calculated from the amount of Tax payable.
    (2)
    The amount of the Surtax rates referred to in paragraph (1) is stipulated by a Perda.
     
     
     
     

    Article 84
    (1)
    Surtax is collected concurrently with the Taxes subject to the Surtax.
    (2)
    Further provisions on procedures for the collection of Surtax referred to in paragraph (1) are regulated by or based on a Government Regulation.
     
     
     
     
    Paragraph 16
    Provincial Tax Revenue Sharing
     

    Article 85
    (1)
    PBBKB revenues are shared in the amount of 70% (seventy per cent) to regencies/municipalities.
    (2)
    PAP revenues are shared in the amount of 50% (fifty per cent) to regencies/municipalities.
    (3)
    Specifically for PAP revenues from water sources located only in 1 (one) area of a regency/municipality, the said PAP revenues are shared with the regencies/municipalities by 80% (eighty per cent).
    (4)
    Cigarette Tax revenues are shared by 70% (seventy per cent) with regencies/municipalities.
    (5)
    The share of the regencies/municipalities referred to in paragraph (1), paragraph (2) and paragraph (4) are set as follows:
     
    a.
    PBBKB is distributed proportionally at a minimum of 70% (seventy per cent) based on the number of Motor Vehicles registered in the regencies/municipalities concerned and the difference is divided equally among all regencies/municipalities in the province concerned;
     
    b.
    PAP is distributed proportionally at least based on the length of the river and/or the expanse of catchment area; and
     
    c.
    Cigarette Tax is distributed proportionally at least based on the population of the regencies/municipalities in the province concerned.
    (6)
    Further provisions on revenue sharing to regencies/municipalities referred to in paragraph (5) are regulated by a provincial Perda.
     
     
     
     
    Paragraph 17
    Tax Revenues with Directed Use
     

    Article 86
    (1)
    Revenues from the following types of taxes:
     
    a.
    PKB and PKB Surtax;
     
    b.
    PBJT on Electricity;
     
    c.
    Cigarette Tax; and
     
    d.
    PAT,
     
    both the shares of provinces and the shares of regencies/municipalities may be allocated to fund activities with specified use.
    (2)
    The amount of certain per centages and activities referred to in paragraph (1) is aligned with public services in respect of the types of Taxes.
    (3)
    Further provisions on certain per centages and activities referred to in paragraph (2) are regulated by or based on a Government Regulation.
     
     
     
     
    Section Two
    User Charges

    Paragraph 1
    Types and Objects of User Charges
     

    Article 87
    (1)
    The types of User Charges consist of:
     
    a.
    Public Service User Charges;
     
    b.
    Business Service User Charges; and
     
    c.
    Certain Permit User Charges.
    (2)
    User Charge Objects are the provision/service of goods and/or services and the granting of certain permits to individuals or Entities by the Local Governments.
    (3)
    User Charge Payers include individuals or Entities that use/enjoy goods, services and/or permit services.
    (4)
    User Charge Payers referred to in paragraph (3) are obliged to pay for used/enjoyed services.
     
     
     
     
    Paragraph 2
    Types of Service User Charges
     

    Article 88
    (1)
    The types of services constituting the Public Service User Charge objects referred to in Article 87 paragraph (1) subparagraph a include:
     
    a.
    health services;
     
    b.
    cleaning services;
     
    c.
    on-street parking services;
     
    d.
    market services; and
     
    e.
    traffic control.
    (2)
    The types of services referred to in paragraph (1) may not be subject to User Charge collection if the potential revenue is insignificant and/or in the context of implementing national/local policies to provide these services free of charge.
    (3)
    The types of provision/service of goods and/or services constituting the Business Services User Charge objects referred to in Article 87 paragraph (1) subparagraph b include:
     
    a.
    the provision of places of business in the form of wholesale markets, shops and other places of business;
     
    b.
    the provision of auction houses for fish, livestock, agricultural produce and forest produce, including other facilities within the auction houses;
     
    c.
    the provision of special off-street parking spaces;
     
    d.
    the provision of inns/lodgings/villas;
     
    e.
    livestock slaughterhouse services;
     
    f.
    port services;
     
    g.
    recreational, tourism and sports services;
     
    h.
    transport services of people or goods using vehicles on water;
     
    i.
    product sales of the Local Governments’s business; and
     
    j.
    the utilisation of Local assets that does not interfere with the implementation of the organisational tasks and functions of the Local government departments and/or optimisation of Local assets by not changing the ownership status pursuant to statutory provisions.
    (4)
    The types of permit services constituting the Certain Permit User Charge objects referred to in Article 87 paragraph (1) subparagraph c include:
     
    a.
    building approval;
     
    b.
    the foreign worker employment; and
     
    c.
    people’s mining management.
    (5)
    User Charges on the building approval referred to in paragraph (4) subparagraph a are levies on the issuance of building approvals by Regions.
    (6)
    User Charges on the foreign worker employment referred to in paragraph (4) subparagraph b are compensation funds for foreign worker employment for the ratification of the extended foreign worker employment plan according to the work area of the foreign workers.
    (7)
    User Charges on the people’s mining management referred to in paragraph (4) subparagraph c are Local levies in the form of people’s mining contributions to the holders of people’s mining permits by the Local Governments to delegate the Government’s authority in the mineral and coal mining sector.
    (8)
    The addition to the types of User Charges other than the types of User Charges referred to in paragraph (1), paragraph (3) and paragraph (4) are stipulated by a Government Regulation.
    (9)
    The provisions stipulated in the Government Regulation referred to in paragraph (8) include:
     
    a.
    User Charge object;
     
    b.
    User Charge Subjects and Payers;
     
    c.
    Principles and targets for the stipulation of User Charge rates; and
     
    d.
    Procedures for the calculation of User Charges.
     
     
     
     

    Article 89
    Further provisions on User Charges are regulated by or based on a Government Regulation.
     
     
     
     
    Paragraph 3
    Procedures for the Calculation of User Charges
     

    Article 90
    The amount of User Charge payable is calculated based on the multiplication of the level of service use by the User Charge rate.
     
     
     
     

    Article 91
    The level of service use referred to in Article 90 constitutes the amount of service use as the basis for the allocation of the cost burden borne by the Local Governments for the provision of the services concerned.
     
     
     
     

    Article 92
    (1)
    The User Charge rate referred to in Article 90 is the rupiah value set to calculate the amount of User Charge payable.
    (2)
    The User Charge rate referred to in paragraph (1) may be set uniformly or variably according to the group pursuant to the principles and objectives of the stipulation of the User Charge rate.
     
     
     
     

    Article 93
    (1)
    The User Charge rates referred to in Article 90 are reviewed no later than every 3 (three) years.
    (2)
    The User Charges rates referred to in paragraph (1) shall be reviewed by taking into account the price index and economic developments, without adding the User Charge objects.
    (3)
    The User Charge rates referred to in paragraph (2) are stipulated by a Perkada.
     
     
     
     
    Section Three
    Perda Contents Concerning Taxes and User Charges
     

    Article 94
    The types of Taxes and User Charges, Tax Subjects and Taxpayers, User Charge Subjects and User Charge Payers, Tax and User Charge objects, Tax bases, level of use of User Charge services, when Taxes are payable, Tax collection areas as well as Tax and User Charges rates, for all types Taxes and User Charges are stipulated in 1 (one) Perda and constitute the basis for the collection of Taxes and User Charges in Regions.
     
     
     
     
    Section Four
    The Collection of Taxes and User Charges

    Paragraph 1
    General Provisions and Procedures for the Collection of Taxes and User Charges
     

    Article 95
    (1)
    Taxes and User Charges are collected pursuant to general provisions and procedures for the collection of Taxes and User Charges.
    (2)
    The general provisions and procedures for the collection of Taxes and User Charges referred to in paragraph (1) include the regulation of:
     
    a.
    registration and data collection;
     
    b.
    stipulation of the amount of Tax and User Charge payable;
     
    c.
    payment and remittance;
     
    d.
    filing;
     
    e.
    relief, amendment and cancellation of assessments;
     
    f.
    Tax audits;
     
    g.
    the collection of Taxes and User Charges;
     
    h.
    objection;
     
    i.
    lawsuit;
     
    j.
    the write-off of Taxes and User Charge receivables by the Head of the Region; and
     
    k.
    other regulations in respect of the procedures for the collection of Taxes and User Charges.
    (3)
    General provisions and procedures for the collection of Taxes and User Charges referred to in paragraph (2) are regulated by or based on a Government Regulation.
     
     
     
     
    Paragraph 2
    The Granting of Relief, Reduction and Exemption
     

    Article 96
    (1)
    The Head of the Region may provide relief, reduction, exemption and payment deferral of the principal and/or penalties of Taxes and User Charges.
    (2)
    The relief, reduction, exemption and payment deferral referred to in paragraph (1) shall be granted by taking into account the conditions of the Taxpayer or User Charge Payers and/or Taxable objects or User Charge objects.
     
     
     
     
    Section Five
    The Regulation of Taxes and User Charges in the Context of Supporting Ease of Doing Business and Investing

    Paragraph 1
    The Government’s Authority in Rate Supervision and Evaluation
     

    Article 97
    (1)
    In the context of implementing the national fiscal policies and supporting the ease of investing policy and encouraging the growth of highly competitive industries and/or businesses and providing fair protection and regulation, the Government according to national priority programs may adjust the Tax and User Charge policies stipulated by the Local Governments.
    (2)
    The national fiscal policies in respect of Taxes and User Charges referred to in paragraph (1) are in the form of:
     
    a.
    possible changes to Taxes rates and User Charge rates with the stipulation of nationally applicable Tax rates and User Charge rates; and
     
    b.
    supervision and evaluation of the Perda concerning Taxes and User Charges that hinder the investment ecosystem and ease of doing business.
    (3)
    The stipulation of nationally applicable Tax rates referred to in paragraph (2) subparagraph a includes rates for the provincial and regency/municipal types of Taxes referred to in Article 4.
    (4)
    The stipulation of nationally applicable User Charges rates referred to in paragraph (2) subparagraph a includes User Charge objects referred to in Article 87.
    (5)
    Further provisions on procedures for the stipulation of the rates of Taxes and User Charges referred to in paragraph (2) subparagraph a are regulated by or based on a Government Regulation.
     
     
     
     
    Paragraph 2
    Evaluation of Draft Perda and Perda on Taxes and User Charges
     

    Article 98
    (1)
    Draft provincial Perda concerning Taxes and User Charges is evaluated by the minister administering domestic Governmental Affairs and the Minister.
    (2)
    The draft provincial Perda concerning Taxes and User Charges that has been jointly approved by the provincial DPRD and the governor prior to the enactment must be submitted to the minister administering domestic Governmental Affairs and the Minister no later than 3 (three) working days since the date of approval.
    (3)
    Draft regency/municipality Perda concerning Taxes and User Charges is evaluated by the governor, the minister administering domestic Governmental Affairs and the Minister.
    (4)
    Draft regency/municipality Perda concerning Taxes and User Charges that has been jointly approved by the regency/municipal DPRD and the regent/mayor prior to the enactment must be submitted to the governor, the minister administering domestic Governmental Affairs and the Minister no later than 3 (three) working days since the date of approval.
    (5)
    The Minister administering domestic Governmental Affairs evaluates the draft Perda referred to in paragraph (1) to assess the conformity of the draft Perda to the provisions under this Law, the public interest and/or other higher statutory provisions.
    (6)
    The Governor evaluates the draft Perda referred to in paragraph (3) to assess the conformity of the draft Perda to the provisions under this Law, the public interest and/or other higher statutory provisions.
    (7)
    The minister administering domestic Governmental Affairs and the governor in conducting the evaluation referred to in paragraph (5) and paragraph (6) shall coordinate with the Minister.
    (8)
    In implementing the coordination referred to in paragraph (7), the Minister evaluates in terms of national fiscal policies.
    (9)
    The evaluation results which have been coordinated with the Minister as referred to in paragraph (7) may be in the form of approval or rejection.
    (10)
    The evaluation results referred to in paragraph (9) are submitted by the minister administering domestic Governmental Affairs to the governor for draft provincial Perda and by the governor to regents/mayors for draft regency/municipal Perda no later than 15 (fifteen) working days since the receipt of the said draft Local Regulation with a copy to the Minister.
    (11)
    Evaluation results in the form of rejection referred to in paragraph (9) shall be submitted with the reasons for the rejection.
    (12)
    In the event of evaluation results in the form of approval as referred to in paragraph (9), the said draft Perda may be immediately enacted.
    (13)
    In the event of evaluation results in the form of rejection as referred to in paragraph (9), the said draft Perda may be revised by the governor, regent/mayor together with the DPRD concerned, to be re-submitted to the minister administering domestic Governmental Affairs and the Minister for draft provincial Perda and to the governor and the Minister for draft regency/municipal Perda.
    (14)
    Further provisions on procedures for the evaluation of the draft Perda concerning Taxes and User Charges are regulated by or based on a Government Regulation.
     
     
     
     

    Article 99
    (1)
    Perda that has been enacted by the governor/regent/mayor is submitted to the minister administering domestic Governmental Affairs and the Minister no later than 7 (seven) working days after it is enacted for evaluation.
    (2)
    The Minister and minister administering domestic Governmental Affairs shall evaluate the applicable provincial/regency/municipal Perda concerning Taxes and User Charges to assess the conformity of the said Perda to the public interest, higher statutory provisions and national fiscal policies.
    (3)
    In the event that based on the evaluation referred to in paragraph (1) and paragraph (2), Perda contradicts public interest, higher statutory provisions and/or national fiscal policies, the Minister shall recommend amendments to the said Perda to the minister administering domestic Governmental Affairs.
    (4)
    The recommendation for amendments to Perda by the Minister to the minister administering domestic Governmental Affairs referred to in paragraph (3) is submitted no later than 20 (twenty) working days from the date of receipt of the Perda referred to in paragraph (1).
    (5)
    Based on the recommendation for amendments to Perda submitted by the Minister, the minister administering domestic Governmental Affairs shall instruct the governor/regent/mayor to amend the Perda within 15 (fifteen) working days.
    (6)
    If within 15 (fifteen) working days, the governor/regent/mayor does not amend the said Perda, the minister administering domestic Governmental Affairs submits the recommendation for the imposition of penalties to the Minister.
    (7)
    Further provisions on procedures for the evaluation of Perda concerning Taxes and User Charges and supervision of the implementation of Perda concerning Taxes and User Charges and the implementing regulations thereto are regulated by or based on a Government Regulation.
     
     
     
     

    Article 100
    (1)
    Violation of the provisions referred to in Article 98 and Article 99 by the Regions shall be subject to penalties in the form of deferral or cutback of DAU and/or DBH.
    (2)
    The penalties referred to in paragraph (1) shall be imposed by the Minister pursuant to statutory provisions.
     
     
     
     
    Paragraph 3
    The Granting of Tax and User Charge Facilities
     

    Article 101
    (1)
    In supporting the ease of investing policy, governors/regents/mayors may grant fiscal incentives to entrepreneurs in their regions.
    (2)
    The fiscal incentives referred to in paragraph (1) are in the form of reduction, relief and exemptions or nullification of Tax principal, User Charge principal and/or penalties.
    (3)
    The fiscal incentives referred to in paragraph (2) may be granted based on the application of Taxpayers and User Charge Payers or granted ex officio by the Head of the Region based on considerations, among others:
     
    a.
    the ability to pay of Taxpayers and User Charge Payers;
     
    b.
    certain conditions of the Taxable object, such as the Taxable object being affected by a natural disaster, fire and/or other causes that do not occur due to an element of intent by the Taxpayer and/or other parties to avoid tax payments;
     
    c.
    to support and protect micro and ultra-micro entrepreneurs;
     
    d.
    to support the Local Governments’ policies in achieving Local priority programs; and/or
     
    e.
    to support the Government’s policies in achieving national priority programs.
    (4)
    The granting of fiscal incentives referred to in paragraph (2) shall be notified to the DPRD by attaching the Head of the Region's considerations in granting such fiscal incentives.
    (5)
    The granting of fiscal incentives referred to in paragraph (2) is stipulated by a Perkada.
    (6)
    Further provisions on procedures for the granting of fiscal incentives referred to in paragraph (2) are regulated by or based on a Government Regulation.
     
     
     
     
    Section Six
    Stipulation of Revenue Targets of Taxes and User Charges in APBD
     

    Article 102
    (1)
    Budgeting for Taxes and User Charges in the APBD at least considers:
     
    a.
    Locall macroeconomic policies; and
     
    b.
    Tax and User Charge potentials.
    (2)
    The Local macroeconomic policies referred to in paragraph (1) subparagraph a include Local economic structure, Local economic growth projections, income inequality, human development index, tax independence, unemployment rate, poverty level and Local competitiveness.
    (3)
    The Macroeconomic policies referred to in paragraph (1) subparagraph a are aligned with local macroeconomic policies and macroeconomic policies underlying the formulation of APBN.
     
     
     
     
    Section Seven
    Taxpayer Data Confidentiality
     

    Article 103
    (1)
    Any official is prohibited from informing other parties of all matters known or notified to him/her by Taxpayers in the context of his/her position or work to implement statutory provisions in the field of Local taxation.
    (2)
    The prohibition referred to in paragraph (1) also applies to professionals appointed by the Head of the Region to assist in the implementation of statutory provisions in the field of Local taxation.
    (3)
    Excluded from the provisions referred to in paragraph (1) and paragraph (2) are:
     
    a.
    Officials and/or professionals acting as witnesses or experts in court proceedings; and
     
    b.
    Officials and/or professionals appointed by the Head of the Region to provide information to officials of state institutions or Government agencies authorised to conduct audits in the Local Finances sector.
    (4)
    For Local interest, the Head of the Region is authorised to give written permission to the officials referred to in paragraph (1) and the professionals referred to in paragraph (2), in order to provide information, show written evidence from or concerning Taxpayers to the appointed parties.
    (5)
    For court examination purposes in criminal or civil cases, at the request of the judge according to the code of criminal procedures law and code of civil procedures law, the Head of the Region may give written permission to the officials referred to in paragraph (1) and the professionals referred to in paragraph (2), to provide and show written evidence and information from the Taxpayers available to them.
    (6)
    The judge’s request referred to in paragraph (5) must state the suspect’s name or the defendant’s name, the requested information as well as the connection between the criminal or civil case concerned and the requested information.
     
     
     
     
    Section Eight
    Incentives for the Collection of Taxes and User Charges
     

    Article 104
    (1)
    Agencies that collect Taxes and User Charges may be given incentives based on the achievement of certain performance.
    (2)
    The granting of incentives referred to in paragraph (1) are stipulated through APBD.
    (3)
    Further provisions on procedures for the granting and utilisation of incentives referred to in paragraph (1) are regulated by or based on a Government Regulation.
     
     
     
     
    Section Nine
    Investigations
     

    Article 105
    (1)
    Certain civil servants within the Local Governments are granted special authority as investigators to investigate crimes in the in the field of Local taxation and User Charges as referred to in the Law concerning the Code of Criminal Procedures.
    (2)
    Investigators referred to in paragraph (1) are certain civil servants within the Local Governments appointed by the competent authority pursuant to statutory provisions.
    (3)
    The investigators referred to in paragraph (1) are authorised to:
     
    a.
    receive, seek, collect and examine information or reports relating to crimes in the in the field of Local taxation and User Charges, thereby, the information or reports become more complete and clearer;
     
    b.
    examine, seek and collect information on individuals or Entities concerning the truth of the committed actions in respect of crimes in the in the field of Local taxation and User Charges;
     
    c.
    request information and evidence from individuals or Entities in respect of crimes in the in the field of Local taxation and User Charges;
     
    d.
    examine books of accounts, records and other documents relating to crimes in the in the field of Local taxation and User Charges;
     
    e.
    conduct searches to obtain evidence of bookkeeping, recording and other documents as well as confiscating the said evidence;
     
    f.
    request assistance from professionals in the context of carrying out the task of investigating crimes in the in the field of Local taxation and User Charges;
     
    g.
    order a person to stop and/or prohibit a person from leaving the room or premises while the examination is in progress and check the person’s identity, on-hand objects and/or documents;
     
    h.
    photograph a person in respect of crimes in the in the field of Local taxation and User Charges;
     
    i.
    subpoena individuals to be heard and examined as the suspect or witnesses;
     
    j.
    terminate investigations; and/or
     
    k.
    conduct other necessary legal measures to expedite crimes in the in the field of Local taxation and User Charges pursuant to statutory provisions.
    (4)
    Investigators referred to in paragraph (1) shall notify the commencement of an investigation and submit investigation results to the public prosecutor through the investigators of the Indonesian National Police pursuant to the provisions under the Law concerning the Code of Criminal Procedures.
     
     
     
     
    CHAPTER III
    TRANSFERS TO REGIONS

    Section One
    Types and Policies of TKD
     

    Article 106
    TKD consists of:
    a.
    DBH;
    b.
    DAU;
    c.
    DAK;
    d.
    Special Autonomy Fund;
    e.
    Privilege Fund; and
    f.
    Village Fund.
     
     
     
     

    Article 107
    (1)
    The government shall stipulate TKD policies.
    (2)
    The TKD policies referred to in paragraph (1) refer to the national medium-term development plans and related statutory provisions, in line with the government’s work plans and outlined in the financial note and draft APBN for the following fiscal year.
    (3)
    The TKD policies referred to in paragraph (1) are submitted to the House of Representatives annually.
    (4)
    The TKD policies referred to in paragraph (3) are first discussed in the local autonomy advisory council forum before the submission of the financial note and draft APBN to the House of Representatives.
     
     
     
     
    Section Two
    Budget and Allocation of TKD
     

    Article 108
    (1)
    TKD budget referred to in Article 106 is stipulated annually in the Law concerning APBN.
    (2)
    Details of TKD allocation by province/regency/municipality referred to in paragraph (1) are stipulated in a Presidential Regulation.
     
     
     
     

    Article 109
    (1)
    The TKD policies referred to in Article 107 paragraph (2) and the amount of the budget referred to in Article 108 paragraph (1) may be adjusted by taking into account the conditions of the national economy.
    (2)
    The adjustments referred to in paragraph (1) shall be carried out pursuant to statutory provisions.
     
     
     
     
    Section Three
    DBH

    Paragraph 1
    General
     

    Article 110
    The DBH ceiling referred to in Article 106 letter a is stipulated based on the realisation of revenues in the previous 1 (one) year.
     
     
     
     

    Article 111
    (1)
    DBH consists of:
     
    a.
    tax DBH; and
     
    b.
    natural resource DBH.
    (2)
    Tax DBH referred to in paragraph (1) subparagraph a consists of:
     
    a.
    Income Tax;
     
    b.
    Land and Building Tax; and
     
    c.
    tobacco excise.
    (3)
    Natural resource DBH referred to in paragraph (1) subparagraph b consists of:
     
    a.
    forestry;
     
    b.
    mineral and coal;
     
    c.
    crude oil and natural gas;
     
    d.
    geothermal; and
     
    e.
    fishery.
     
     
     
     
    Paragraph 2
    Tax DBH
     

    Article 112
    (1)
    Income Tax DBH referred to in Article 111 paragraph (2) subparagraph a is Article 21 Income Tax and Article 25 Income Tax and Article 29 Income Tax for Resident Individual Taxpayers collected by the Government pursuant to statutory provisions.
    (2)
    Income Tax DBH referred to in paragraph (1) is set at 20% (twenty per cent) for Regions, distributed to:
     
    a.
    the province concerned by 7.5% (seven point five per cent);
     
    b.
    producing regencies/municipalities by 8.9% (eight point nine per cent); and
     
    c.
    other regencies and municipalities in the province concerned by 3.6% (three point six per cent).
    (3)
    Taxpayer registration of Income Tax regulated in paragraph (1) is carried out based on a Ministerial Regulation.
     
     
     
     

    Article 113
    (1)
    Land and Building Tax DBH referred to in Article 111 paragraph (2) subparagraph b is set at 100% (one hundred per cent) for Regions.
    (2)
    The Land and Building Tax DBH for Regions referred to in paragraph (1) is distributed to:
     
    a.
    the province concerned by 16.2% (sixteen point two per cent);
     
    b.
    producing regencies/municipalities by 73.8% (seventy-three point eight per cent); and
     
    c.
    other regencies/municipalities in the province concerned by 10% (ten per cent).
     
     
     
     

    Article 114
    (1)
    The tobacco excise DBH referred to in Article 111 paragraph (2) subparagraph c is set at 3% (three per cent) of the domestic tobacco excise revenues.
    (2)
    The tobacco excise DBH for Regions referred to in paragraph (1) is distributed to the Regions producing excise, producing tobacco and/or other Regions which include:
     
    a.
    the province concerned by 0.8% (zero point eight per cent);
     
    b.
    producing regencies/municipalities by 1.2% (one point two per cent); and
     
    c.
    other regencies and municipalities in the province concerned by 1% (one per cent).
    (3)
    The tobacco excise DBH referred to in paragraph (2) is used pursuant to statutory provisions.
     
     
     
     
    Paragraph 3
    Natural Resource DBH
     

    Article 115
    (1)
    Forestry natural resource DBH referred to in Article 111 paragraph (3) subparagraph a is sourced from the revenues from:
     
    a.
    fees for permits to utilise forest;
     
    b.
    forest resource provision; and
     
    c.
    reforestation fund.
    (2)
    Forestry natural resource DBH sourced from the fees for permits to utilise forest referred to in paragraph (1) subparagraph a is set at 80% (eighty per cent) for the Local share, is distributed to:
     
    a.
    the province concerned by 32% (thirty-two per cent); and
     
    b.
    producing regencies/municipalities by 48% (forty-eight per cent).
    (3)
    Forestry natural resource DBH sourced from the forest resource provision referred to in paragraph (1) subparagraph b generated from the Local areas concerned, is set at 80% (eighty per cent), is distributed to:
     
    a.
    the province concerned by 16% (sixteen per cent);
     
    b.
    producing regencies/municipalities by 32% (thirty-two per cent);
     
    c.
    other regencies/municipalities directly adjacent to the producing regencies/municipalities by 16% (sixteen per cent); and
     
    d.
    other regencies/municipalities in the province concerned by 16% (sixteen per cent).
    (4)
    Forestry natural resource DBH sourced from the reforestation fund referred to in paragraph (1) subparagraph c is set at 40% (forty per cent) for producing provinces.
    (5)
    Forestry natural resource DBH sourced from the reforestation fund referred to in paragraph (4) shall be used pursuant to statutory provisions in the forestry sector.
     
     
     
     

    Article 116
    (1)
    Mineral and coal natural resource DBH referred to in Article 111 paragraph (3) subparagraph b is sourced from the revenues from:
     
    a.
    fixed contributions; and
     
    b.
    production fees.
    (2)
    Mineral and coal natural resource DBH sourced from fixed contributions referred to in paragraph (1) subparagraph a generated from the land area and coastal marine area up to 4 (four) miles from the coastline, is set at 80% (eight twenty per cent) for Regions, is distributed to:
     
    a.
    the province concerned by 30% (thirty per cent); and
     
    b.
    producing regencies/municipalities by 50% (fifty per cent).
    (3)
    Mineral and coal natural resource DBH sourced from fixed contributions referred to in paragraph (1) subparagraph a obtained from the coastal marine area above 4 (four) miles from the coastline up to 12 (twelve) miles from the coastline, set at 80% (eighty per cent) for the producing provinces.
    (4)
    Mineral and coal natural resource DBH sourced from production fees referred to in paragraph (1) subparagraph b generated from the land area and coastal marine area up to 4 (four) miles from the coastline is set at 80% (eighty) per cent) for Regions, is distributed to:
     
    a.
    the province concerned by 16% (sixteen per cent);
     
    b.
    producing regencies/municipalities by 32% (thirty-two per cent);
     
    c.
    other regencies/municipalities directly adjacent to the producing regencies/municipalities by 12% (twelve per cent);
     
    d.
    other regencies/municipalities in the province concerned by 12% (twelve per cent); and
     
    e.
    processing regencies/municipalities by 8% (eight per cent).
    (5)
    Mineral and coal natural resource DBH sourced from production fees referred to in paragraph (1) subparagraph b generated from the coastal marine area above 4 (four) miles from the coastline up to 12 (twelve) miles from the coastline is set at 80% (eighty per cent), is distributed to:
     
    a.
    producing provinces by 26% (twenty-six per cent);
     
    b.
    other regencies/municipalities in the province concerned by 46% (forty-six per cent); and
     
    c.
    processing regencies/cities by 8% (eight per cent).
     
     
     
     

    Article 117
    (1)
    Crude oil and natural gas resource DBH referred to in Article 111 paragraph (3) subparagraph c is sourced from the state’s share generated from crude oil and natural gas mining operations after deducted by the components of taxes and other levies pursuant to statutory provisions.
    (2)
    Crude oil resource DBH referred to in paragraph (1), generated from the land area and coastal marine sea area up to 4 (four) miles from the coastline, is set at 15.5% (fifteen point five per cent), is distributed to:
     
    a.
    the province concerned by 2% (two per cent);
     
    b.
    producing regencies/municipalities by 6.5% (six point five per cent);
     
    c.
    other regencies/municipalities directly adjacent to the producing regencies/municipalities by 3% (three per cent);
     
    d.
    other regencies/municipalities in the province concerned by 3% (three per cent); and
     
    e.
    processing regencies/municipalities by 1% (one per cent).
    (3)
    Crude oil resource DBH referred to in paragraph (1), generated from the coastal marine area above 4 (four) miles from the coastline up to 12 (twelve) miles from the coastline is set at 15.5% (fifteen point five per cent), is distributed to:
     
    a.
    producing provinces by 5% (five per cent);
     
    b.
    other regencies/municipalities in the province concerned by 9.5% (nine point five per cent); and
     
    c.
    processing regencies/municipalities by 1% (one per cent).
    (4)
    Natural gas resource DBH referred to in paragraph (1), generated from the land area and coastal marine area as far as 4 (four) miles from the coastline, is set at 30.5% (thirty point five per cent), is distributed to:
     
    a.
    the province concerned by 4% (four per cent);
     
    b.
    producing regencies/municipalities by 13.5% (thirteen point five per cent);
     
    c.
    other regencies/municipalities directly adjacent to the producing regencies/municipalities by 6% (six per cent);
     
    d.
    other regencies/municipalities in the province concerned by 6% (six per cent); and
     
    e.
    processing regencies/municipalities by 1% (one per cent).
    (5)
    Geothermal natural resource DBH obtained from the coastal marine area above 4 (four) miles from the coastline up to 12 (twelve) miles from the coastline is set at 30.5% (thirty point five per cent), is distributed to:
     
    a.
    producing provinces by 10% (ten per cent);
     
    b.
    other regencies/municipalities in the province concerned by 19.5% (nineteen point five per cent); and
     
    c.
    processing regencies/municipalities by 1% (one per cent).
     
     
     
     

    Article 118
    (1)
    Geothermal natural resource DBH referred to in Article 111 paragraph (3) subparagraph d, is sourced from:
     
    a.
    fixed contributions; and
     
    b.
    production fees.
    (2)
    Geothermal natural resource DBH referred to in paragraph (1), including those sourced from the Government’s share of remittance based on geothermal concession contracts signed prior to Law Number 27 of 2003 concerning Geothermal.
    (3)
    Geothermal natural resource DBH referred to in paragraph (1) generated from the Local areas concerned is set at 80% (eighty per cent), is distributed to:
     
    a.
    the province concerned by 16% (sixteen per cent);
     
    b.
    producing regencies/municipalities by 32% (thirty-two per cent);
     
    c.
    other regencies/municipalities directly adjacent to the producing regencies/municipalities by 12% (twelve per cent);
     
    d.
    other regencies/municipalities in the province concerned by 12% (twelve per cent); and
     
    e.
    processing regencies/municipalities by 8% (eight per cent).
     
     
     
     

    Article 119
    (1)
    Natural fishery resource DBH referred to in Article 111 paragraph (3) subparagraph e is set at 80% (eighty per cent) of the revenues from fishery cultivation levies and fishery product levies.
    (2)
    Natural fishery resource DBH for the Regions referred to in paragraph (1) is distributed to regencies/municipalities throughout Indonesia and Provincial areas which are not divided into autonomous regencies/municipalities by considering the expanse of the coastal marine area.
     
     
     
     

    Article 120
    Based on the DBH ceiling referred to in Article 110, the allocation of DBH per provincial/regency/municipal Region is calculated based on the following weighting:
    a.
    90% (ninety per cent) based on the per centage of revenue sharing and stipulation of the producing Regions referred to in Article 112 to Article 119; and
    b.
    10% (ten per cent) based on the Local Governments’ performance.
     
     
     
     

    Article 121
    In the event that there are no processing regencies/municipalities as referred to in Article 116, Article 117 and Article 118, the portion of processing regencies/municipalities shall be distributed equally to other regencies/municipalities in the province concerned and other regencies/municipalities directly adjacent to the producing regencies/municipalities.
     
     
     
     

    Article 122
    The per centage of DBH distribution referred to in Article 112 to Article 120 may be amended by a Government Regulation after consultation with the commission in charge of the finance sector at the House of Representatives.
     
     
     
     

    Article 123
    (1)
    In addition to DBH referred to in Article 111 paragraph (1), the Government may stipulate other types of DBH.
    (2)
    Other DBH referred to in paragraph (1) is sourced from state revenues of which the producing Regions may be identified.
    (3)
    Other DBH referred to in paragraph (1) is used to fund certain activities according to Local authority and/or national priorities.
    (4)
    Further provisions on other DBH referred to in paragraph (1) are regulated in a Government Regulation after consultation with the commission in charge of finance at the House of Representatives.
     
     
     
     
    Section Four
    DAU
     

    Article 124
    (1)
    The national DAU ceiling is stipulated by taking into account:
     
    a.
    public service needs as part of the administration of Governmental Affairs under the authority of the Regions;
     
    b.
    State Financial capability;
     
    c.
    the overall TKD ceiling; and
     
    d.
    national development targets.
    (2)
    The proportion of the DAU ceiling between provincial and regency/municipal Regions takes into account the funding needs in the context of administering Governmental Affairs under the authority of the Regions between provinces and regencies/municipalities.
    (3)
    The proportion of the DAU ceiling for provincial and regency/municipal Regions is divided into several groups based on certain characteristics.
     
     
     
     

    Article 125
    (1)
    DAU for each Region is allocated based on the fiscal gap for 1 (one) fiscal year.
    (2)
    The fiscal gap referred to in paragraph (1) is calculated as the difference between the Local fiscal needs and the Local revenue potential.
    (3)
    Local fiscal needs referred to in paragraph (2) are local funding needs in the context of administering Governmental Affairs under the authority of the Regions.
    (4)
    Local revenue potential referred to in paragraph (2) is the sum of PAD potential, DBH allocation and non-physical DAK allocation.
     
     
     
     

    Article 126
    (1)
    The Local funding needs in the context of administering Governmental Affairs referred to in Article 125 paragraph (3) is calculated based on the estimated cost unit multiplied by the number of service target units for each affair and multiplied by the adjustment factor and taking into account the basic needs of government administration.
    (2)
    The cost unit referred to in paragraph (1) is calculated by taking into account the investment costs in the context of administering Governmental Affairs under the authority of the Regions.
    (3)
    The number of service target units for each affair referred to in paragraph (1) is the number of target service recipients, such as the total population or the number of students and gaps in the level of basic infrastructure needs in the administration of Governmental Affairs under the authority of the Regions.
    (4)
    The adjustment factor referred to in paragraph (1) is an indicator that takes into account, among others, the expanse of the area, area characteristics and construction cost index.
     
     
     
     

    Article 127
    The data for calculating Local fiscal needs and the Local revenue potential referred to in Article 125 paragraph (3) and paragraph (4) are obtained from the Government agency authorised to issue data pursuant to statutory provisions.
     
     
     
     

    Article 128
    (1)
    DAU of a province is calculated based on the multiplication of the weight of the province concerned by the total DAU of all provinces in the group referred to in Article 124 paragraph (3).
    (2)
    The weight of the province referred to in paragraph (1) is calculated by dividing the fiscal gap of the province concerned by the total fiscal gap of all provinces in the group referred to in Article 124 paragraph (3).
     
     
     
     

    Article 129
    (1)
    DAU of a regency/municipality is calculated based on the multiplication of the weight of the regency/municipality concerned by the total DAU of all regencies/municipalities in the group referred to in Article 124 paragraph (3).
    (2)
    The weight of the regency/municipality referred to in paragraph (1) is calculated by dividing the fiscal gap of the regency/municipality concerned by the total fiscal gap of all regencies/municipalities in the group referred to in Article 124 paragraph (3).
     
     
     
     

    Article 130
    (1)
    DAU referred to in Article 128 paragraph (1) and Article 129 paragraph (1) is used to achieve minimum service standards based on the level of Local service performance achievement.
    (2)
    The use of DAU referred to in paragraph (1) consists of DAU fraction with unspecified use and DAU fraction with specified use.
    (3)
    The portion of DAU with specified use referred to in paragraph (2) includes supporting the development of facilities and infrastructure as well as community empowerment in sub-districts.
     
     
     
     
    Section Five
    DAK
     

    Article 131
    (1)
    DAK is allocated according to Government policies to fund certain programs, activities and/or policies with the aim of:
     
    a.
    achieving national priorities;
     
    b.
    accelerating Local development;
     
    c.
    reducing public service gaps;
     
    d.
    encouraging local economic growth; and/or
     
    e.
    supporting the operation of public services.
    (2)
    Government policies referred to in paragraph (1) are based on:
     
    a.
    national medium-term development plans;
     
    b.
    government work plans;
     
    c.
    macroeconomic framework and fiscal policy points;
     
    d.
    the President’s directives; and
     
    e.
    statutory provisions.
    (3)
    DAK referred to in paragraph (1) consists of:
     
    a.
    physical DAK, which is used to support the development/procurement of Local public service facilities and infrastructure;
     
    b.
    non-physical DAK, which is used to support the operation of Local public services; and
     
    c.
    grants to Regions, which are used to support the physical development and/or certain Local public services based on agreements between the Government and Local Governments.
    (4)
    The planning and allocation of DAK referred to in paragraph (1) may be synergised with other funding.
    (5)
    DAK referred to in paragraph (1) is stipulated annually in the Law concerning the State Budget according to State Financial capability.
    (6)
    DAK referred to in paragraph (1) is allocated to achieve Local performance targets set by the Government.
    (7)
    Grants to Regions referred to in paragraph (3) subparagraph c, which are sourced from overseas, are carried out through the Government.
     
     
     
     
    Section Six
    Special Autonomy Fund
     

    Article 132
    (1)
    Special Autonomy Fund is allocated to Regions with special autonomy pursuant to the Law on special autonomy.
    (2)
    Special Autonomy Fund referred to in paragraph (1) is distributed between provinces and regencies/municipalities in the provincial area concerned fairly and transparently pursuant to the Law on special autonomy.
    (3)
    Special Autonomy Fund is managed based on the planning that refers to the national medium-term development plans and Local medium-term development plans as well as performance targets.
     
     
     
     
    Section Seven
    Privilege Fund
     

    Article 133
    (1)
    Privilege Fund is allocated to the Local Governments of the Special Region of Yogyakarta pursuant to statutory provisions on the privileges of the Special Region of Yogyakarta.
    (2)
    Privilege Fund referred to in paragraph (1) may be granted to regencies/municipalities in the area of the Special Region of Yogyakarta according to the special affairs of the Local Government of the Special Region of Yogyakarta carried out by the regency/municipality governments.
    (3)
    Funding for privileges referred to in paragraph (2) is proposed by the regencies/municipalities to the Local Government of the Special Region of Yogyakarta Province by taking into account the needs and priorities of each regency/municipality.
    (4)
    Privilege Fund referred to in paragraph (1) is managed based on the planning that refers to the national medium-term development plans and the Local medium-term development plans as well as performance targets.
     
     
     
     
    Section Eight
    Village Fund
     

    Article 134
    (1)
    Village Fund is village revenues of which the funds are sourced from the APBN.
    (2)
    Village Fund referred to in paragraph (1) is allocated by taking into account equity and fairness which is calculated based on village performance, the number of villages, total population, poverty rate, the expanse of the area and level of geographical difficulty.
    (3)
    The Government may determine the focus of the use of the Village Fund every year according to the national priorities stipulated under statutory provisions on national planning and allocation of TKD.
    (4)
    Budgeting, allocation, reporting, monitoring and evaluation of Village Fund are carried out pursuant to statutory provisions.
     
     
     
     
    Section Nine
    Fiscal Incentives
     

    Article 135
    (1)
    The Government may grant fiscal incentives to Regions for achieving performance based on certain criteria.
    (2)
    Certain criteria referred to in paragraph (1) are in the form of improvement and/or achievement of Local Governance performance, among others, the management of Local Finances, government public services and basic services.
     
     
     
     
    Section Ten
    TKD for Preparatory Regions
     

    Article 136
    (1)
    The Minister shall allocate the fraction of TKD funds referred to in Article 106 subparagraph a and subparagraph b for preparatory Regions.
    (2)
    The fraction of TKD funds for preparatory Regions referred to in paragraph (1) is calculated proportionally from the allocation of TKD funds received by the parent Region based on the total population, expanse of the area, service targets and/or location.
    (3)
    The parent Region shall budget a fraction of TKD funds for the preparatory Regions according to the allocation referred to in paragraph (2) as the preparatory Regions’ Expenditure budget in the parent Region’s APBD.
    (4)
    In the event that a preparatory Region is in the area of a Region that has special autonomy or special privileges, the allocation referred to in paragraph (1) includes the fraction of TKD funds referred to in Article 106 subparagraph d and subparagraph e.
    (5)
    The allocation of TKD funds for preparatory Regions referred to in paragraph (1) and paragraph (4) is granted within a period pursuant to statutory provisions.
     
     
     
     
    Section Eleven
    TKD for New Regions
     

    Article 137
    (1)
    TKD funds referred to in Article 106 for new Regions are allocated independently in the following fiscal year since the promulgation of the Law concerning the establishment of the said Regions.
    (2)
    The provisions referred to in paragraph (1) shall apply to new Regions of which the Law concerning their establishment is promulgated before or on June 30 of the year concerned.
    (3)
    In the event that the Law concerning the establishment of the new Regions is promulgated after June 30 of the year concerned, TKD funds for the new Regions are calculated proportionally from the TKD funds allocated to the parent Region.
    (4)
    The proportion of TKD funds referred to in paragraph (3), among others, is calculated based on the total population, the expanse of the area, service targets, location and/or the status of DBH producing Regions.
    (5)
    In the event that the Law concerning the establishment of the new Regions is promulgated after the stipulation of APBN for the following year, the distribution of TKD between the parent Region and the new Region is outlined in a Presidential Regulation.
     
     
    Section Twelve
    Distribution of TKD
     

    Article 138
    (1)
    TKD is distributed through overbooking from the state treasury to the Local treasury.
    (2)
    The distribution referred to in paragraph (1) may be carried out simultaneously or in stages by considering:
     
    a.
    State Financial capability;
     
    b.
    performance of the implementation of activities in the Regions funded by Taxes and TKD funds; and/or
     
    c.
    policies of the control of Local Expenditures and Local treasury,
     
    in the context of synergies of national fiscal management.
     
     

    Article 139
    Further provisions on the mechanism for the planning, budgeting, allocation, distribution, use, reporting, supervision, monitoring and evaluation of TKD referred to in Article 106 to Article 138 are regulated by or based on a Government Regulation.
     
    CHAPTER IV
    LOCAL EXPENDITURE MANAGEMENT

    Section One
    Local Expenditure Budgeting
     

    Article 140
    Local Expenditures are formulated using the following approaches:
    a.
    Local medium-term spending framework;
    b.
    integrated budgeting; and
    c.
    performance-based budgeting.
     
     

    Article 141
    (1)
    Local Governments shall formulate Local development programs according to the priorities and needs of the Regions that are oriented towards fulfilling the mandatory Governmental Affairs needs related to basic public services and the achievement of development targets.
    (2)
    The programs referred to in paragraph (1) are synchronised and harmonised with the programs implemented by the Government.
     
     

    Article 142
    (1)
    Budget allocation for each Local government work unit is determined based on the public service performance target of each Governmental Affair.
    (2)
    Budget allocation for each Local government work unit referred to in paragraph (1) is not carried out based on considerations of equity among Local government work units or based on budget allocation in the previous fiscal year.
    (3)
    To focus on the achievement of public service targets, Local government work units budget the programs and activities under the authority of the Regions based on a priority scale.
     
     

    Article 143
    (1)
    Local Expenditures are formulated based on price standards and analysis of expenditure standards.
    (2)
    Price standards referred to in paragraph (1) include price standards for operating expenses and performance allowance standards for state civil servants in Local Governments.
    (3)
    Price standards for operating expenses referred to in paragraph (2) are formulated based on local unit price standards by taking into account the needs, appropriateness and fairness.
    (4)
    Performance allowance standards for state civil servants in the Local Governance referred to in paragraph (2) are formulated by at least taking into account the achievements of Local bureaucratic reform, job grades and the Local Financial capability concerned.
    (5)
    Analysis of expenditure standards referred to in paragraph (1) is formulated based on an assessment of the fairness of the workload and costs used to carry out an activity.
    (6)
    Guidelines on price standards and analysis of expenditure standards referred to in paragraph (1) are further regulated by or based on a Government Regulation.
     
     

    Article 144
    (1)
    Expenditures for the fulfillment of mandatory Governmental Affairs needs related to the basic public services referred to in Article 141 paragraph (1) shall be adjusted to the need to achieve minimum service standards.
    (2)
    Local Expenditures may be allocated for the administration of mandatory Governmental Affairs that are not related to basic public services and selected Governmental Affairs after considering the fulfillment of mandatory Governmental Affair needs related to the basic public services referred to in paragraph (1).
     
     

    Article 145
    (1)
    Regions are required to allocate expenditures to fund certain Local Governmental Affairs, the amount of which has been stipulated pursuant to statutory provisions.
    (2)
    Local Expenditures originating from TKD with specified use are budgeted and carried out pursuant to statutory provisions.
     
     

    Article 146
    (1)
    Regions are required to allocate Local personnel expenditures excluding teacher allowances allocated through TKD at a maximum of 30% (thirty per cent) of the total APBD expenditures.
    (2)
    In the event that the per centage of personnel expenditures referred to in paragraph (1) has exceeded 30% (thirty per cent), the Region must adjust the portion of personnel expenditures no later than 5 (five) years from the date of promulgation of this Law.
    (3)
    The per centage of personnel expenditures referred to in paragraph (1) may be adjusted through a Ministerial decree after coordinating with the minister administering domestic Governmental Affairs and the minister administering Governmental Affairs in the state civil servant development and bureaucratic reform sectors.
     
     

    Article 147
    (1)
    Regions are required to allocate public service infrastructure expenditures of a minimum of 40% (forty per cent) of the total APBD expenditures excluding revenue sharing expenditures and/or transfers to Regions and/or villages.
    (2)
    Revenue sharing expenditures and/or transfers to Regions and/or villages referred to in paragraph (1) shall be carried out pursuant to statutory provisions.
    (3)
    In the event that the per centage of public service infrastructure expenditures referred to in paragraph (1) has not yet reached 40% (forty per cent), the Region must adjust the portion of public service infrastructure expenditures no later than 5 (five) years since the date of promulgation of this Law.
    (4)
    The per centage of expenditures referred to in paragraph (1) may be adjusted through a Ministerial decree after coordinating with the minister administering domestic Governmental Affairs and the relevant technical minister by considering, among others, the direction of national infrastructure development stated in the national medium-term development plans.
     
     

    Article 148
    In the event that a Region does not implement the provisions on the Local Expenditure allocation referred to in Article 145 to Article 147, the Region may be subject to penalties of the deferral and/or cutback of TKD funds with unspecified use.
     
     
    Section Two
    Optimisation of SiLPA for Local Expenditures
     

    Article 149
    (1)
    In the event of SiLPA with specified use pursuant to statutory provisions in the previous fiscal year, the Region is obliged to budget the said SiLPA according to its use.
    (2)
    In the event that the Local SiLPA is high and the service performance is high, SiLPA may be invested and/or used for the establishment of Local Endowment Funds by taking into account the needs constituting the Local priorities that must be fulfilled.
    (3)
    In the event that Local SiLPA is high and service performance is low, the Government may direct the use of the intended SiLPA for Local public service infrastructure expenditures oriented towards Local economic development.
    (4)
    Service performance assessment referred to in paragraph (2) and paragraph (3) uses applicable performance assessment results for the calculation of DAU.
    (5)
    Further provisions on the optimisation of SiLPA for Local Expenditures are regulated by or based on a Government Regulation.
     
     
    Section Three
    Development of Local Financial Management Officers
     

    Article 150
    The government carries out capacity building for the Local Financial management officers with the aim of improving the quality of Local Financial management and sustainably increasing competence.
     

    Article 151
    (1)
    Local Financial management officers must obtain certification granted by an agency assigned by the Government to organise capacity building for the Local Financial management officers referred to in Article 150.
    (2)
    The certification obligation referred to in paragraph (1) shall be implemented with a transition period of up to 3 (three) years since the date of promulgation of this Law.
    (3)
    Further provisions on the implementation of the development of Local financial management officials and the standardisation are regulated by or based on a Government Regulation.
     
     
    Section Four
    Supervision of APBD
     

    Article 152
    (1)
    APBD management is supervised pursuant to statutory provisions.
    (2)
    The government agency in charge of supervision that is directly responsible to the President, in certain cases, conducts internal supervision of the draft APBD or APBD implementation in the context of providing input to the President.
    (3)
    In carrying out the supervision referred to in paragraph (2), the government agency in charge of supervision that is directly responsible to the President coordinates with the minister administering domestic Governmental Affairs.
    (4)
    The ministry administering domestic Governmental Affairs in cooperation with the government agency in charge of supervision that is directly responsible to the President shall strengthen the capability of the Local Governments’ internal supervisory officers to support the improvement of the quality of APBD management.
     
     

    Article 153
    Further provisions on procedures for the management of Local Expenditures and supervision of APBD are regulated by or based on a Government Regulation.
     
     
     
     
    CHAPTER V
    LOCAL DEBT FINANCING
     

    Article 154
    (1)
    Local Debt Financing consists of:
     
    a.
    Local Loans;
     
    b.
    Local Government Bonds; and
     
    c.
    Regional Sharia Bonds.
    (2)
    Local Debt Financing referred to in paragraph (1) is used to finance Governmental Affairs under the authority of Regions.
    (3)
    The Government does not provide guarantees for Local Debt Financing.
    (4)
    Local Governments are prohibited from conducting direct Financing from foreign parties.
    (5)
    The maximum net value of Local Debt Financing referred to in paragraph (1) within 1 (one) fiscal year shall be approved by DPRD.
    (6)
    DPRD’s approval referred to in paragraph (5) is given when APBD is discussed.
    (7)
    In certain cases, the Head of the Region may carry out Financing in excess of the maximum net value that has been approved by the DPRD referred to in paragraph (5) and reported as an amendment to APBD of the year concerned.
    (8)
    Local Debt Financing that fulfills the technical requirements may be carried out beyond the Head of the Region’s remaining term of office after receiving consideration from the Minister, the minister administering domestic Governmental Affairs and the minister administering Governmental Affairs in the national development planning sector.
     
     
     
     
    Section One
    Local Loans
     

    Article 155
    (1)
    Local Loans may be sourced from:
     
    a.
    the Government;
     
    b.
    other Local Governments;
     
    c.
    banking financial institutions; and/or
     
    d.
    non-banking financial institutions.
    (2)
    Local Loans sourced from the Government referred to in paragraph (1) subparagraph a are granted through the Minister after obtaining consideration from the minister administering domestic Governmental Affairs and the minister administering Governmental Affairs in the national development planning sector.
    (3)
    Local Loans sourced from the Government referred to in paragraph (2) may be carried out through an assignment to banking financial institutions or non-banking financial institutions.
    (4)
    Local Loans referred to in paragraph (1) subparagraph b, subparagraph c and subparagraph d shall be carried out according to the provisions of the lender.
    (5)
    Local Loans may be conventional or sharia.
     
     
     
     

    Article 156
    (1)
    Local Loans are carried out in the context of:
     
    a.
    cash management;
     
    b.
    financing Local infrastructure development;
     
    c.
    managing Local debt portfolio; and/or
     
    d.
    forwarding loans and/or capital participation to BUMD.
    (2)
    Local Loans in the context of cash management referred to in paragraph (1) subparagraph a are carried out without the DPRD’s approval.
    (3)
    Local Loans in the context of cash management referred to in paragraph (1) subparagraph a must be settled in the fiscal year concerned.
    (4)
    Local Loans in the context of financing Local infrastructure development referred to in paragraph (1) subparagraph b may be in the form of cash loans and/or activity loans.
    (5)
    Local Loans in the context of forwarding loans and/or capital participation to BUMD referred to in paragraph (1) subparagraph d are in the form of an assignment from the Government/Local Governments to BUMD to finance nationally strategic programs/activities or other assignments pursuant to statutory provisions.
    (6)
    The assignment from Local Governments to BUMD referred to in paragraph (5) which does not constitute nationally strategic programs/activities must obtain the approval of the minister administering domestic Governmental Affairs.
     
     
     
     
    Section Two
    Local Government Bonds and Regional Sharia Bonds
     

    Article 157
    (1)
    Local Government Bonds and Regional Sharia Bonds are issued in the context of:
     
    a.
    financing Local infrastructure development;
     
    b.
    managing Local debt portfolio; and/or
     
    c.
    forwarding loans and/or capital participation to BUMD for the proceeds from sales of Local Government Bonds and Regional Sharia Bonds.
    (2)
    Local Government Bonds and Regional Sharia Bonds are issued through the domestic capital market and in Rupiah currency.
    (3)
    Local Government Bonds and Regional Sharia Bonds in the context of financing Local infrastructure development referred to in paragraph (1) subparagraph a are issued for the provision of Local facilities and infrastructure.
    (4)
    Local Government Bonds and Regional Sharia Bonds referred to in paragraph (1) are issued with the approval of the Minister after receiving consideration from the minister administering domestic Governmental Affairs.
    (5)
    Regional Sharia Bonds referred to in paragraph (1) are issued after obtaining a statement of conformity of the Regional Sharia Bonds to sharia principles from a capital market sharia expert.
     
     
     
     

    Article 158
    (1)
    Local property and/or Financing objects financed from Regional Sharia Bonds may be used as the basis for the issuance of Regional Sharia Bonds.
    (2)
    Local property referred to in paragraph (1) referred to as Regional Sharia Bonds assets, may be in the form of:
     
    a.
    land and/or buildings; and
     
    b.
    other than land and/or buildings.
    (3)
    Regional Sharia Bond assets referred to in paragraph (2) may not be transferred and/or written off until the maturity of the Regional Sharia Bonds.
     
     
     
     
    Section Three
    Management and Accountability
     

    Article 159
    The Head of the Region is accountable for the management of Local Loan Financing.
     
     
     
     

    Article 160
    (1)
    Local Governments are prohibited from providing guarantees for the Financing of other parties’ debts.
    (2)
    Local property cannot be used as guarantees or pawned to acquire Local Debt Financing.
     
     
     
     

    Article 161
    (1)
    Local Governments are required to pay Local Debt Financing liability at maturity.
    (2)
    Funds to pay the Local Loan Financing liability referred to in paragraph (1) are budgeted in APBD until the expiration of the liability.
    (3)
    In the event that the Local Governments do not budget the payment of Local Loan Financing liability referred to in paragraph (2), the Head of the Region and DPRD are subject to administrative penalties in the form of non-payment of financial rights regulated under statutory provisions for 6 (six) months.
     
     
     
     

    Article 162
    (1)
    In the event that a Region does not pay the Local Loan liability sourced from the Government and agency assigned by the Government that has matured, the Minister may cut back TKD funds with unspecified use.
    (2)
    The cutback referred to in paragraph (1) shall be carried out after coordinating with the minister administering domestic Governmental Affairs.
     
     
     
     

    Article 163
    Further provisions on the requirements, procedures and mechanisms of Local Loan Financing as well as Local property and/or Financing objects financed from Regional Sharia Bonds in the context of the issuance of Regional Sharia Bonds referred to in Article 154 to Article 162 are regulated by or based on Government Regulation.
     
     
     
     
    CHAPTER VI
    ESTABLISHMENT OF LOCAL ENDOWMENT FUNDS
     

    Article 164
    (1)
    Regions may establish Local Endowment Funds which are stipulated by a Perda.
    (2)
    The establishment of the Local Endowment Funds referred to in paragraph (1) considers, among others, the Local fiscal capacity and the fulfillment of mandatory Governmental Affairs needs related to basic public services.
    (3)
    Proceeds of the management of the Local Endowment Funds referred to in paragraph (1) are intended for:
     
    a.
    obtaining economic benefits, social benefits and/or other previously stipulated benefits;
     
    b.
    contributing to local income; and
     
    c.
    organising cross-generational public benefits.
     
     
     
     

    Article 165
    (1)
    Local Endowment Funds referred to in Article 164 paragraph (1) are managed by the Local general treasurer or Local public service agency.
    (2)
    Local Endowment Funds are managed in investments that are free from impairment risk.
    (3)
    Proceeds from the management of the Local Endowment Funds referred to in paragraph (1) constitute Local Revenues.
     
     
     
     

    Article 166
    Further provisions on procedures for the establishment and management of Local Endowment Funds are regulated by or based on a Government Regulation.
     
     
     
     
    CHAPTER VII
    FUNDING SYNERGY
     

    Article 167
    (1)
    In the context of accelerating the provision of infrastructure and/or other priority programs according to the affairs under the Regions’ authority, Local Governments may carry out Funding Synergy.
    (2)
    Funding Synergy referred to in paragraph (1) may be implemented through various funding sources, both from APBD and from other than APBD.
    (3)
    Funding from APBD referred to in paragraph (2) may originate from PAD, TKD and/or Local Loan Financing.
    (4)
    Funding other than from APBD referred to in paragraph (2) may be in the form of cooperation with the private sector, state-owned enterprises, BUMD and/or other Local Governments.
    (5)
    To support the Funding Synergy referred to in paragraph (1), the Government may synergise with the expenditures of ministries/agencies and/or co-administration.
     
     
     
     

    Article 168
    Further provisions on the Funding Synergy referred to in Article 167 are regulated by or based on a Government Regulation.
     
     
     
     
    CHAPTER VIII
    NATIONAL FISCAL POLICY SYNERGY
     

    Article 169
    (1)
    The government synergises national fiscal policies.
    (2)
    The national fiscal policy synergy referred to in paragraph (1) is carried out through:
     
    a.
    alignment of central and Local fiscal policies;
     
    b.
    stipulation of the maximum threshold of APBD and Local Debt Financing deficit;
     
    c.
    control in an emergency; and
     
    d.
    standard chart of accounts synergy.
     
     
     
     

    Article 170
    (1)
    Local Governments synergise development policies and Local fiscal policies with national medium-term development plans, government work plans, macroeconomic framework and fiscal policy key points, Presidential directives and statutory provisions referred to in Article 169 paragraph (2).
    (2)
    The national medium-term development plans and the government’s work plans referred to in paragraph (1) consider various local strategic program proposals according to the mechanism regulated under statutory provisions on the national development planning system.
     
     
     
     

    Article 171
    Alignment with the national medium-term plans and government work plans referred to in Article 170 is carried out through the alignment of Local macro performance targets and Local program performance targets with national priorities.
     
     
     
     

    Article 172
    The maximum threshold of APBD and Local Debt Financing deficits referred to in Article 169 paragraph (2) subparagraph b is stipulated with the following provisions:
    a.
    the Minister shall stipulate the cumulative maximum threshold of APBD deficit for the following fiscal year, no later than August in the current budget year, taking into account the conditions and developments of the national economy;
    b.
    the cumulative amount of APBD deficit and APBN deficit does not exceed 3% (three per cent) of the estimated gross domestic product for the fiscal year concerned; and
    c.
    the cumulative amount of Government loans and Local Debt Financing does not exceed 60% (sixty per cent) of the estimated gross domestic product for the fiscal year concerned.
     
     
     
     

    Article 173
    Control in an emergency referred to in Article 169 paragraph (2) subparagraph c is carried out with the following provisions:
    a.
    the Government may require Regions to prioritise the use of budget allocations for certain activities (refocusing), change allocations and change the use of APBD;
    b.
    the Government may adjust the amount of the maximum threshold of APBD and Local Debt Financing deficits referred to in Article 172; and
    c.
    provisions on prioritising the use of budget allocations for certain activities (refocusing), change of allocations and change of the use of APBD referred to in subparagraph a and adjustments to the maximum threshold of APBD and Local Debt Financing deficits referred to in subparagraph b, are further regulated by a Ministerial Regulation after coordinating with the minister administering domestic Governmental Affairs.
     
     
     
     

    Article 174
    The standard chart of accounts synergy referred to in Article 169 paragraph (2) subparagraph d is carried out at least through the alignment of programs and activities and output with the Regions’ authority pursuant to statutory provisions.
     
     
     
     

    Article 175
    The Government may impose penalties in the form of deferral and/or cutback of TKD in the event that the Local Governments do not fulfill their obligations as referred to in Article 170 to Article 174.
     
     
     
     

    Article 176
    National fiscal policy synergy referred to in Article 169 is supported by:
    a.
    national formulation of consolidated financial information of Local Governments according to the standard chart of accounts for Local Governments;
    b.
    national presentation of Local financial information; and
    c.
    monitoring and evaluation of decentralised funding.
     
     
     
     

    Article 177
    The government builds an information system for Local development, management of Local Finances and other information through a digital platform that is interconnected with the information system for the consolidation of national fiscal policies.
     
     
     
     

    Article 178
    In the context of nationally presenting Local financial information as referred to in Article 176 subparagraph b, Local Governments digitally provide local financial information in a network.
     
     
     
     

    Article 179
    (1)
    The Government shall at least conduct periodic monitoring and evaluation of:
     
    a.
    implementation of TKD; and
     
    b.
    implementation of APBD.
    (2)
    Monitoring and evaluation referred to in paragraph (1) are carried out using the information system referred to in Article 177.
    (3)
    Results of the monitoring and evaluation referred to in paragraph (1) may be used as considerations for the Government in setting national fiscal policies, TKD and/or granting penalties or incentives to Local Governments.
     
     
     
     

    Article 180
    Further provisions regarding the national fiscal policy synergy referred to in Article 169 to Article 179 are regulated by or based on a Government Regulation.
     
     
     
     
    CHAPTER IX
    CRIMINAL PROVISIONS
     

    Article 181
    (1)
    Taxpayers that, due to their negligence, do not fulfill the tax obligations referred to in Article 5 paragraph (5), thereby, causing losses to Local Finances, are subject to an imprisonment sentence for a maximum of 1 (one) year or a sentence of fine of a maximum of 2 (two) times the amount of the unpaid or underpaid Tax payable.
    (2)
    Taxpayers that intentionally do not fulfill the tax obligations referred to in Article 5 paragraph (5), thereby, causing losses to Local Finances, are subject to an imprisonment sentence for a maximum of 2 (two) years or a a sentence of fine of a maximum of 4 (four) times the amount of the unpaid or underpaid Tax payable.
     
     
     
     

    Article 182
    Crimes in the Local taxation sector cannot be prosecuted if a period of 5 (five) years has elapsed since the Tax becomes payable or the Taxable period ends or the fraction of the Tax Year ends or the Tax Year concerned ends.
     
     
     
     

    Article 183
    User Charge Payers that do not carry out their obligations as referred to in Article 87 paragraph (4), thereby, causing losses to Local Finances, are subject to an imprisonment sentence for a maximum of 3 (three) months or a a sentence of fine of a maximum of 3 (three) times the amount of User Charge payable which is not or underpaid.
     
     
     
     

    Article 184
    Officials or professionals who violate the prohibitions referred to in Article 103 paragraph (1) and paragraph (2), are subject to criminal penalties pursuant to statutory provisions.
     
     
     
     

    Article 185
    Fines referred to in Article 181, Article 183 and Article 184 constitute state revenues.
     
     
     
     
    CHAPTER X
    OTHER PROVISIONS
     

    Article 186
    In the event of State Finance charges due to legal actions by administrative elements of the Local Governance and a court decision with permanent legal force has been obtained, the accountability for the legal actions shall be taken into account with the cutback of TKD.
     
     
     
     
    CHAPTER XI
    TRANSITIONAL PROVISIONS
     

    Article 187
    When this Law comes into force:
    a.
    for Taxpayers and User Charge Payers’ rights and obligations that have not been settled before the promulgation of this Law, the settlement is carried out pursuant to statutory provisions in the Taxes and User Charge sectors stipulated prior to the enactment of this Law;
    b.
    Perda concerning Taxes and User Charges formulated pursuant to Law Number 28 of 2009 concerning Local Taxes and User Charges remains valid for a maximum of 2 (two) years since the date of promulgation of this Law;
    c.
    the provisions on Motor Vehicle Tax, Motor Vehicle Duty, Non-Metallic Mineral and Rock Tax, Motor Vehicle Tax revenue sharing and Motor Vehicle Duty revenue sharing in the Perda formulated pursuant to Law Number 28 of 2009 concerning Local Taxes and User Charges specifically remain valid until 3 (three) years since the date of promulgation of this Law;
    d.
    in the event that the period referred to in subparagraph b and subparagraph c cannot be fulfilled, the provisions on Taxes and User Charges shall comply with the provisions under this Law;
    e.
    the application of DAU pursuant to the provisions under this Law may not result in a decrease in DAU allocation per region for a maximum of 5 (five) years since the enactment of the provisions on DAU allocation pursuant to this Law; and
    f.
    provisions on DBH regulated under Law Number 11 of 2006 concerning the Government of Aceh and Law Number 21 of 2001 concerning Special Autonomy for the Papua Province as amended several times, last amended by Law Number 2 of 2021 concerning the Second Amendment to Law Number 21 of 2001 concerning Special Autonomy for the Papua Province, are declared to remain valid insofar as they are not stipulated otherwise under this Law.
     
     
     
     

    Article 188
    When this Law comes into force:
    a.
    statutory provisions constituting implementing regulations of Law Number 33 of 2004 concerning the Fiscal Balance between Central Government and Local Governance (State Gazette of the Republic of Indonesia of 2004 Number 126, Supplement to the State Gazette of the Republic of Indonesia Number 4438); and
    b.
    statutory provisions constituting implementing regulations of Law Number 28 of 2009 concerning Local Taxes and User Charges (State Gazette of the Republic of Indonesia of 2009 Number 130, Supplement to the State Gazette of the Republic of Indonesia Number 5049) as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation (State Gazette of the Republic of Indonesia of 2020 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6573),
    are declared to remain valid insofar as they have not been replaced and do not contradict the provisions under this Law.
     
     
     
     
    CHAPTER XII
    CLOSING PROVISIONS
     

    Article 189
    (1)
    When this Law comes into force:
     
    a.
    Law Number 33 of 2004 concerning the Fiscal Balance between Central Government and Local Governance (State Gazette of the Republic of Indonesia of 2004 Number 126, Supplement to the State Gazette of the Republic of Indonesia Number 4438);
     
    b.
    Law Number 28 of 2009 concerning Local Taxes and User Charges (State Gazette of the Republic of Indonesia of 2009 Number 130, Supplement to the State Gazette of the Republic of Indonesia Number 5049) as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation (State Gazette of the Republic of Indonesia of 2020 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6573);
     
    c.
    Article 1 number 30, Article 1 number 38, Article 1 number 47 to number 49, Article 245 insofar as relating to Local Taxes and User Charges, Article 279, Article 285 paragraph (2) subparagraph a number 1 to number 4, Article 288 to Article 291, Article 296, Article 302, Article 324 and Article 325 of Law Number 23 of 2014 concerning Local Governance (State Gazette of the Republic of Indonesia of 2014 Number 244, Supplement to the State Gazette of the Republic of Indonesia Number 5587) as amended several times, last amended by Law Number 11 of 2020 concerning Job Creation (State Gazette of the Republic of Indonesia of 2020 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6573); and
     
    d.
    Article 114 and Article 176 number 4 paragraph (4) in Article 252 and number 7 of Law Number 11 of 2020 concerning Job Creation (State Gazette of the Republic of Indonesia of 2020 Number 245, Supplement to the State Gazette of the Republic of Indonesia Number 6573),
     
    are revoked and declared invalid.
    (2)
    All statutory provisions relating to Financial Relations between the Central Government and Local Governance as well as Taxes and User Charges are declared to remain valid insofar as they do not contradict this Law.
     
     
     
     

    Article 190
    Provisions on incentives for the collection of Taxes and User Charges regulated under Article 104 may only be implemented until the regulation on state civil servants’ income has taken into account the job grades for the duties and functions of the collection of Taxes and User Charges.
     
     
     
     

    Article 191
    (1)
    Provisions on PKB, BBNKB, MBLB Tax, PKB Surtax, BBNKB Surtax and MBLB Tax Surtax regulated under this Law shall come into force 3 (three) years since the date of promulgation of this Law.
    (2)
    Provisions on the allocation of DAU and DBH referred to in Article 106 are fully implemented starting the 2023 Fiscal Year.
     
     
     
     

    Article 192
    The implementing regulations of this Law shall be stipulated no later than 2 (two) years since this Law comes into force.
     
     
     
     

    Article 193
    This Law shall come into force on the date of promulgation.
     
     
     
     
    For public cognisance, this Law shall be promulgated by placement in the State Gazette of the Republic of Indonesia.
     
     
     
     
    Ratified in Jakarta
    on 5 January 2022
    PRESIDENT OF THE REPUBLIC OF INDONESIA,
    signed
    JOKO WIDODO

    Promulgated in Jakarta
    on 5 January 2022
    MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,
    signed
    YASONNA H. LAOLY

    STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2002 NUMBER 4

    ELUCIDATION

    OF
     
    LAW OF THE REPUBLIC OF INDONESIA
    NUMBER 1 OF 2022
     
    CONCERNING
     
    FINANCIAL RELATIONS BETWEEN THE CENTRAL GOVERNMENT AND LOCAL GOVERNANCE
     
     
    I.
    GENERAL
     
    1.
    Financial Relations between the Central Government and Regions
     
     
    As outlined in the Preamble to the 1945 Constitution of the Republic of Indonesia, the state was established with the aim of protecting the entire Indonesian nation and the entire Indonesian homeland and to promoting public welfare, educating the nation and participating in the world order based on independence, eternal peace and social justice. Further, pursuant to Article 18 of the 1945 Constitution of the Republic of Indonesia, the Unitary State of the Republic of Indonesia is divided into provincial Regions and provincial Regions are divided into regencies and municipalities. Each province, regency and municipality has its own government. Provincial, regency and municipal governments are entitled to regulate and manage their own Governmental Affairs according to the principle of autonomy and co-administration. Governmental Affairs as the Regions’ responsibility are administered based on the principle of autonomy, whereas Governmental Affairs which are not the Local Governments’ responsibility are administered based on the principles of deconcentration and co-administration. The administration of Governmental Affairs from the central to the Local level is part of the government power that is in the hands of the President pursuant to the 1945 Constitution of the Republic of Indonesia, thereby, cannot run independently. This requires a synergy of funding for these affairs in the context of achieving the state goals.
     
    The division of the Unitary State of the Republic of Indonesia into provinces, regencies and municipalities and the division of Governmental Affairs between these governments results in authority and financial relations. Pursuant to the mandate of Article 18A paragraph (2) of the 1945 Constitution of the Republic of Indonesia, financial relations, public services as well as the utilisation of natural resources and other resources between the Government and Local Governments are regulated and implemented fairly and harmoniously pursuant to the Law.
     
    To carry out the mandate of Article 18A paragraph (2) of the 1945 Constitution of the Republic of Indonesia, a Law concerning Financial Relations between the Central Government and Local Governance has been formulated. The formulation of this Law is also based on the idea of the need to improve the Financial Relations between the Central Government and Local Governance which have been carried out pursuant to Law Number 33 of 2004 concerning the Fiscal Balance between the Central Government and Local Governance and Law Number 28 of 2009 concerning Local Taxes and User Charges.
     
    The implementation of Financial Relations between the Central Government and Local Governance is perfected as an effort to render an efficient allocation of national resources through transparent, accountable and fair Financial Relations between the Central Government and Local Governance to realise equitable distribution of public services and improve the people’s welfare throughout the entire territory of the Unitary State of the Republic of Indonesia. To realise these goals, the Financial Relations between the Central Government and Local Governance are based on 4 (four) main pillars, namely: developing a Tax system that supports an efficient allocation of national resources, developing Financial Relations between the Central Government and Local Governance in minimising vertical and horizontal inequality through TKD and Local Debt Financing policies, encouraging the improvement of the quality of Local Expenditures as well as the harmonisation of fiscal policies between the Government and Regions for the optimal implementation of public services and maintenance of fiscal sustainability.
     
    2.
    Tax and User Charge System
     
     
    To allocate national resources more efficiently, the Government authorises Regions to collect Taxes and User Charges by strengthening through restructuring the types of Taxes, providing new sources of Local taxation, simplifying the types of User Charges and harmonisation with Law Number 11 of 2020 concerning Job Creation.
     
    Tax restructuring is carried out through the reclassification of 5 (five) consumption-based Taxes into one type of Tax, namely PBJT. This is aimed at (i) aligning Taxable Objects between central taxes and local taxes to avoid duplication of tax collection; (ii) simplifying tax administration to obtain greater benefits than the collection costs; (iii) facilitating the monitoring of integrated Tax collection by the Regions; and (iv) facilitating the public in fulfilling their tax obligations as well as supporting the ease of doing business by simplifying tax administration. In addition to the integration of consumption-based local Taxes, PBJT regulates the expansion of Taxable Objects, such as valet parking, recreational objects and rental of sports facilities and infrastructure (sports game objects).
     
    The Government also grants the authority to collect Tax Surtaxes among the governments at the provincial and regency/municipal levels, namely PKB, BBNKB and MBLB Tax. The Surtax on PKB and BBNKB is, in essence, a diversion from provincial tax revenue sharing. This may increase Local independence without increasing the Taxpayer’s burden because tax revenues will be recorded as PAD as well as providing certainty on Tax revenues and providing flexibility in spending of these revenues at each level of government compared to the revenue sharing scheme. On the other hand, the addition of MBLB Tax Surtax for provinces as a new source of revenues is expected to strengthen the functions of permit issuance and mining supervision in Regions. This will support better quality Local Financial management due to better planning, budgeting and realisation of APBD. Tax Surtaxs will also encourage the Regions’ role to extensify Local taxation for both the provincial and regency/municipal governments.
     
    User Charges are simplified by rationalising the number of User Charges. User Charges are classified into 3 (three) types, namely General Service User Charges, Business Service User Charges and Certain Permit User Charges. Furthermore, the number of types of User Charge Objects has been simplified from 32 (thirty-two) types to 18 (eighteen) types of services. The aim of the rationalisation is for the User Charges to be collected by the Local Governments are User Charges that may be collected effectively and with low collection costs and compliance costs. In addition, rationalisation is intended to reduce the people’s burden in accessing basic public services which constitute the Local Governments’ obligations. The rationalisation is also in line with the implementation of Law Number 11 of 2020 concerning Job Creation in the context of encouraging ease of doing business, a conducive investment climate, Local competitiveness and the creation of broader employment opportunities.
     
    Alignment with Law Number 11 of 2020 is carried out through the granting of authority to the Government to review Local Tax rates in the context of providing fiscal incentives to encourage investment development in Regions. The Government may adjust the rates of Taxes and User Charges by stipulating nationally applicable rates as well as supervising and evaluating Perda concerning Taxes and User Charges that hinder the investment ecosystem and ease of doing business.
     
     
     
     
    3.
    TKD
     
     
    TKD as a source of Local Revenues is aimed at reducing fiscal inequality between the central and the Regions (vertical) and inter-Local fiscal inequality (horizontal) as well as encouraging Local performance in realising equitable distribution of public services throughout the Regions. TKD includes DBH, DAU, DAK, Special Autonomy Fund and Privilege Fund and Village Fund.
     
    To achieve the goal of reducing fiscal inequalities and inter-Local service gaps, the management of TKD will prioritise performance, thereby, the needs of government administration and services in Regions may be fulfilled as well as encouraging the Region’s responsibilities in providing better services in an efficient and disciplined manner. For this reason, DBH is allocated based on the realisation of state revenues shared in the previous year to provide revenue certainty for Regions. In addition, the allocation of DBH will take into account the Regions’ performance in strengthening shared state revenues or the conservation of exploitation-affected environment.
     
    DAU allocation is reformulated through calculating fiscal needs based on unit cost and service targets as well as calculating fiscal capacity according to Local revenue potentials, thereby, it better reflects real fiscal needs and capacity. In addition to the allocation aspect, DAU is reformulated in terms of the use aspect intended to encourage the performance of basic public services. On the other hand, DAK will focus more on efforts to support the Regions in achieving national priorities based on performance targets while maintaining equity and balance of inter-Local service levels.
     
    TKD also includes transfer funds regulated in other statutory provisions, namely the Special Autonomy Fund for Aceh, Papua and West Papua, Privilege Fund for the Special Region of Yogyakarta and Village Fund. This is intended to combine these funds in the TKD taxonomy as a whole as well as to strengthen it in the context of encouraging a more precise, transparent and accountable allocation and encouraging the improvement of community service performance through the application of performance targets.
     
    The Government may also grant certain fiscal incentives to certain Regions as a form of appreciation and at the same time, to stimulate Local performance in managing Local Finances, general government services, basic public services and efforts to improve the people’s welfare.
     
     
     
     
    4.
    Local Debt Financing and Funding Synergy
     
     
    Local Financial capability is relatively limited in funding the provision of public facilities and infrastructure. In the context of supporting Regions in developing and providing services to the people, Regions may access Local Debt Financing sources, both conventional and sharia schemes, including Local Loans, Local Government Bonds and Regional Sharia Bonds. The Local Loan scheme will be based on its use and not on the periodisation of the loan term, including loans for cash management, financing for local infrastructure development, portfolio management of Local Loans and forwarding loans and/or BUMD capital participation. In addition, the types of Local Loans will be expanded, namely cash loans and activity loans.
     
    Regions are also given the option to access creative Financing in the form of Local Government Bonds and Regional Sharia Bonds. The expansion of access to Financing for Regions is also followed by simplification of the Financing process, among others, through the integration of DPRD’s approval of Local Debt Financing in the discussion of the draft APBD. In addition, the Government encourages funding synergy between sources of revenues and/or Local Debt Financing, from PAD, TKD, Local Debt Financing, inter-Local cooperation and cooperation between Local Governments and Business Entities in the context of strengthening funding sources for programs/activities to provide more significant benefits.
     
     
     
     
    5.
    Local Expenditure Management
     
     
    In addition to improving policies from the input aspect, this Law encourages the improvement of the quality of Local Expenditures. Local expenditures remain dominated by personnel expenditures and routine operational expenditures and are not managed too efficiently and are not supported by adequate human resources to manage Local Finances. Local Expenditures are still relatively minimally budgeted to support public infrastructure service-oriented spending, thereby, cannot optimally support the achievement of Local development outcomes and Local economic growth. In addition, Local Expenditures frequently run independently with insubstantial and unfocused programs and activities, thereby, in the end, the output and/or outcomes do not result in any significant improvement of the people and are not connected with national priorities and the direction of national fiscal policies.
     
    For this reason, it is necessary to regulate and strengthen the discipline of Local Expenditures in APBD. This regulation is improved starting from the budgeting of Local Expenditures, simplification and synchronisation between Local priority and national priority programs as well as the formulation of Local Expenditures based on price standards (operational expenditures and Local performance allowances) and analysis of expenditure standards. In addition, the discipline of Local Expenditures is strengthened by regulating the allocation of Local Expenditures, such as the obligation to fulfill certain portions of certain types of expenditures, both those mandated under statutory provisions and this Law as well as optimising the use of performance-based SiLPA.
     
    Furthermore, the quality of Local Expenditures is also improved by improving the quality of human resources for the financial management officers in Local Governments and strengthening the supervision aspect. To that end, this Law also mandates the certification of financial management officers in Local Governments and the involvement of the Government’s internal supervisory officers directly responsible to the President to carry out internal supervision of draft APBD draft or implement APBD and strengthen the capability of Local Governments’ internal supervisory officers.
     
    This Law also provides space for certain regions that have adequate fiscal capacity and have properly administered all mandatory basic service matters, to establish Local Endowment Funds to obtain cross-generational benefits.
     
     
     
     
    6.
    National Fiscal Policy Synergy
     
     
    Strengthening the governance of financial relations between the Government and Local Governance cannot stand alone to address the challenges in realising the state goals. Fiscal policies consist of the functions of allocation, distribution and stabilisation, thereby, the implementation of fiscal policies in Regions must be in synergy with fiscal policies in the Government in the context of optimising all fiscal policy instruments to achieve the state goals. To that end, this Law also stipulates how to implement the national fiscal policy synergy, among others, through the alignment of central and Local fiscal policies, stipulation of the maximum threshold for APBD and Local Debt Financing deficits, control in an emergency as well as the standard chart of accounts synergy. The national fiscal policy synergy is supported by an information system that may nationally consolidate government financial statements according to an integrated standard chart of accounts between the Central Government and Local Governance, nationally present information on Local Finances and produce policies based on measurable and structured monitoring and evaluation of Financial Relations between the Government and Local Governance.
     
    With the policies regulated under this law, services to the public in all corners of the archipelago are expected to be more evenly distributed and of adequate quality. Regulations related to Local taxation management, TKD, Local Debt Financing and APBD control are expected to enable Local Governments to achieve national development goals jointly and synergistically with the Government in improving the people’s welfare and encouraging sustainable economic growth.
     
     
     
    II.
    ARTICLE BY ARTICLE
     
    Article 1
    Sufficiently clear.
    Article 2
    Sufficiently clear.
    Article 3
    Sufficiently clear.
    Article 4
    Sufficiently clear.
    Article 5
    Sufficiently clear.
    Article 6
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Subparagraph a
    “The potential is inadequate” refers to the potential revenue from a type of Tax whose value is too small, thereby, the operational cost of its collection is greater than revenues from its collection.
    Subparagraph b
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Article 7
    Sufficiently clear.
    Article 8
    Sufficiently clear.
    Article 9
    Sufficiently clear.
    Article 10
    Paragraph (1)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Progressive tax for the second ownership and so forth is classified according to the vehicle type based on the category of the number of vehicle wheels.
     
    Example: Individuals or Entities that own one 2 (two)-wheeled Motor Vehicles, one 3 (three)-wheeled Motor Vehicles and one 4 (four)-wheeled Motor Vehicles are respectively treated as the first ownership, thereby, they are not subject to a progressive tax.
    Paragraph (2)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Progressive tax for the second ownership and so forth is classified according to the vehicle type based on the category of the number of vehicle wheels.
     
    Example: Individuals or Entities that own one 2 (two)-wheeled Motor Vehicles, one 3 (three)-wheeled Motor Vehicles and one 4 (four)-wheeled Motor Vehicles are respectively treated as the first ownership, thereby, they are not subject to a progressive tax.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 11
    Sufficiently clear.
    Article 12
    Paragraph (1)
    BBNKB is only imposed on the first supply of Motor Vehicles, whereas the second supply and so forth of the said Motor Vehicles (used vehicles) does not constitute a BBNKB object.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Entry of Motor Vehicles to be re-issued from the Indonesian customs territory is a temporary admission intended for re-export pursuant to statutory provisions in the customs sector, for example:
    1.
    vehicles brought by tourists;
    2.
    vehicles used by technicians, journalists, professionals; and
    3.
    temporarily used project vehicles which upon their imports, the goods will clearly be re-exported.
    Subparagraph c
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 13
    Sufficiently clear.
    Article 14
    Sufficiently clear.
    Article 15
    Sufficiently clear.
    Article 16
    Sufficiently clear.
    Article 17
    Sufficiently clear.
    Article 18
    Sufficiently clear.
    Article 19
    Sufficiently clear.
    Article 20
    Sufficiently clear.
    Article 21
    Sufficiently clear.
    Article 22
    Sufficiently clear.
    Article 23
    Sufficiently clear.
    Article 24
    Sufficiently clear.
    Article 25
    Sufficiently clear.
    Article 26
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Price stabilisation is carried out to control fiscal and economic risks.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 27
    Sufficiently clear.
    Article 28
    Sufficiently clear.
    Article 29
    Sufficiently clear.
    Article 30
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    The weight of Surface Water is calculated using indicators that show the impact of extracting/utilising Surface Water on the environment.
    Paragraph (5)
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear.
    Article 31
    Sufficiently clear.
    Article 32
    Sufficiently clear.
    Article 33
    Sufficiently clear.
    Article 34
    Sufficiently clear.
    Article 35
    Sufficiently clear.
    Article 36
    Sufficiently clear.
    Article 37
    Sufficiently clear.
    Article 38
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    Sufficiently clear.
    Subparagraph f
    Sufficiently clear.
    Subparagraph g
    “Land and/or Buildings for railroads, Mass Rapid Transit, Light Rail Transit or the like” refer to rail lines used as transportation infrastructure for the rail-based mode, not including other areas of the stations, such as offices, parking buildings, lounges, dining/drinking facilities and entertainment facilities at the stations.
    Subparagraph h
    Sufficiently clear.
    Subparagraph i
    Sufficiently clear.
    Article 39
    Sufficiently clear.
    Article 40
    Sufficiently clear.
    Article 41
    Sufficiently clear.
    Article 42
    Sufficiently clear.
    Article 43
    Sufficiently clear.
    Article 44
    Sufficiently clear.
    Article 45
    Sufficiently clear.
    Article 46
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear.
    Paragraph (7)
    Acquisition of rights due to a certain bequest or inheritance includes an inheritance or bequest that applies to culture and customs in certain Regions where acquired land/buildings cannot be sold or must be re-bequeathed.
    Paragraph (8)
    Sufficiently clear.
    Article 47
    Sufficiently clear.
    Article 48
    Sufficiently clear
    Article 49
    Sufficiently clear.
    Article 50
    Sufficiently clear.
    Article 51
    Paragraph (1)
    Subparagraph a
    Examples of Sales and/or Supplies of Food and/or Beverages:
    1.
    Bakery A sells bread and beverages to consumers. Bread is produced at another place (bread processing factory), then distributed through Bakery A to be sold to consumers. Bakery A does not provide tables, chairs and/or cutlery at the point of sale. Therefore, Bakery A does not fulfill the criteria of a Restaurant, thereby, the sales of bread and beverages are not subject to PBJT payable, but are value added tax objects.
    2.
    A bakery with trademark B at Mall X in City Z sells bread and beverages to consumers. Bread is produced at another place (bread processing factory), then distributed through Bakery B to be sold to consumers. To improve its service to consumers, Bakery B provides tables and chairs for consumers to dine in. Therefore, the said bakery constitutes a Restaurant, thereby, the sales of bread and beverages subject to PBJT are not value added tax objects.
    3.
    A bakery with trademark B at Shopping Center Y in City Z carries out production (the process of manufacturing and processing ingredients into bread) as well as sales of bread to consumers. The said bakery only manufactures and sells directly to consumers without providing tables, chairs and/or utensils at the point of sale. Therefore, the said bakery does not fulfil the criteria of a Restaurant, thereby, the sales of bread and beverages are subject to PBJT payable, but are value added tax objects. Thus, even if the bakery has the same trademark, there may be differences in tax treatment, depending on the bakery’s real services, whether it only sells (distribution) or provides services like a Restaurant.
    Subparagraph b
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Article 52
    Sufficiently clear.
    Article 53
    Paragraph (1)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    Sufficiently clear.
    Subparagraph f
    Sufficiently clear.
    Subparagraph g
    Sufficiently clear.
    Subparagraph h
    Sufficiently clear.
    Subparagraph i
    Sufficiently clear.
    Subparagraph j
    “Private residences functioned as hotels” refer to houses, apartments and condominiums that are provided as accommodation services similar to hotel accommodation but do not include long-term (more than one month) leases (contracts).
    Subparagraph k
    Sufficiently clear.
    Paragraph (2)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    “Room rental services to be operated at hotels” refer to rooms rented by entrepreneurs to conduct business, such as offices, shops or automated teller machines (ATMs) at hotels.
    Article 54
    Sufficiently clear.
    Article 55
    Paragraph (1)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    Sufficiently clear.
    Subparagraph f
    Sufficiently clear.
    Subparagraph g
    Sufficiently clear.
    Subparagraph h
    “Dexterity games” refer to a form of games located in an arena and/or playground area for a fee, either indoors or outdoors, such as ding-dong, ball toss into bins, paintball and so on.
    Subparagraph i
    “Sports games” refers to a form of rental of space and sports equipment, such as a fitness center, futsal court, tennis court, swimming pool and so forth the use of which is subject to payment.
    Subparagraph j
    Sufficiently clear.
    Subparagraph k
    Sufficiently clear.
    Subparagraph l
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Article 56
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sales or supplies of certain goods and services by Taxpayers, including the provision of accommodation marketed by third parties in the form of residences functioned as hotels. In this condition, the PBJT Taxpayer is the owner or party controlling the residence, supplying accommodation services to end consumers, not the marketing or management service provider through digital platforms.
    Article 57
    Sufficiently clear.
    Article 58
    Sufficiently clear.
    Article 59
    Sufficiently clear.
    Article 60
    Sufficiently clear.
    Article 61
    Sufficiently clear.
    Article 62
    Sufficiently clear.
    Article 63
    Sufficiently clear.
    Article 64
    Sufficiently clear.
    Article 65
    Paragraph (1)
    “Utilisation” refers to the activity of using Ground Water in its source without extraction.
    Paragraph (2)
    Sufficiently clear.
    Article 66
    Sufficiently clear.
    Article 67
    Sufficiently clear.
    Article 68
    Sufficiently clear.
    Article 69
    Sufficiently clear.
    Article 70
    Sufficiently clear.
    Article 71
    Sufficiently clear.
    Article 72
    Sufficiently clear.
    Article 73
    Sufficiently clear.
    Article 74
    Sufficiently clear.
    Article 75
    Sufficiently clear.
    Article 76
    Sufficiently clear.
    Article 77
    Sufficiently clear.
    Article 78
    Sufficiently clear.
    Article 79
    Sufficiently clear.
    Article 80
    Sufficiently clear.
    Article 81
    Sufficiently clear.
    Article 82
    Sufficiently clear.
    Article 83
    Sufficiently clear.
    Article 84
    Sufficiently clear.
    Article 85
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Subparagraph a
    The use of other variables in PBBKB revenue sharing with the highest weight of 30% (thirty per cent) constitutes the respective Region’s authority according to Local policies.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear
     Article 86
    Sufficiently clear.
    Article 87
    Sufficiently clear.
    Article 88
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear.
    Paragraph (7)
    Sufficiently clear.
    Paragraph (8)
    Additional types of User Charges are, for example, oil palm plantation control services.
    Paragraph (9)
    Sufficiently clear.
    Article 89
    Sufficiently clear.
    Article 90
    Sufficiently clear.
    Article 91
    Sufficiently clear.
    Article 92
    Sufficiently clear.
    Article 93
    Sufficiently clear.
    Article 94
    Sufficiently clear.
    Article 95
    Sufficiently clear.
    Article 96
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Conditions of Taxpayers or User Charge Payers are, among others, the ability to pay of Taxpayers or User Charge Payers or the liquidity level of Taxpayers or User Charge Payers.
     
    Conditions of Taxable objects are, among others, very limited agricultural land, land and buildings occupied by Taxpayers or User Charge Payers from certain groups and the value of Taxable objects up to a certain threshold
     Article 97
    Sufficiently clear.
    Article 98
    Sufficiently clear.
    Article 99
    Sufficiently clear.
    Article 100
    Sufficiently clear.
    Article 101
    Sufficiently clear.
    Article 102
    Sufficiently clear.
    Article 103
    Sufficiently clear.
    Article 104
    Sufficiently clear.
    Article 105
    Sufficiently clear.
    Article 106
    Sufficiently clear.
    Article 107
    Sufficiently clear.
    Article 108
    Sufficiently clear.
    Article 109
    Sufficiently clear.
    Article 110
    Sufficiently clear.
    Article 111
    Sufficiently clear.
    Article 112
    Paragraph (1)
    DBH from Article 25 Income Tax and Article 29 Income Tax on Resident Individual Taxpayers, including those whose collection is final pursuant to statutory provisions.
    Paragraph (2)
    “Producing regencies/municipalities” refer to regencies/municipalities where the taxpayers are registered.
    Paragraph (3)
    Sufficiently clear.
    Article 113
    Sufficiently clear.
    Article 114
    Sufficiently clear.
    Article 115
    Paragraph (1)
    Revenues from forestry natural resources are shared pursuant to statutory provisions.
    Paragraph (2)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities where forests are cultivated.
    Paragraph (3)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities where forests are cultivated.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Paragraph (4)
    “Producing provinces” refer to provinces where forests are cultivated.
    Paragraph (5)
    Sufficiently clear.
    Article 116
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities where the mineral and coal mining area is located.
    Paragraph (3)
    “Producing provinces” refer to the provinces where the mineral and coal mining area is located. Mining that is above 12 (twelve) miles is not shared considering that the Regions’ territorial authority is up to 12 (twelve) nautical miles as regulated under statutory provisions
     Paragraph (4)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities where the mineral and coal mining area which has been in production and produced mineral and coal mining commodities is located.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    “Processing regencies/municipalities” refer to regencies/municipalities where mineral and coal processing is located and are at risk of being affected by negative externalities.
    Paragraph (5)
    Subparagraph a
    “Producing provinces” refer to provinces where the mineral and coal mining area which has been in production and produced mineral and coal mining commodities is located.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Article 117
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities that produce crude oil based on the criteria stipulated by the minister in charge of Governmental Affairs in the oil and gas mining sector.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    “Processing regencies/municipalities” refer to regencies/municipalities where crude oil is processed and are at risk of being affected by negative externalities.
    Paragraph (3)
    Subparagraph a
    “Producing provinces” refer to provinces that produce crude oil based on the criteria stipulated by the minister in charge of Governmental Affairs in the oil and gas mining sector
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Paragraph (4)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities that produce natural gas based on the criteria stipulated by the minister in charge of Governmental Affairs in the oil and gas mining sector.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    “Processing regencies/municipalities” refer to regencies/municipalities where natural gas is processed and are at risk of being affected by negative externalities.
    Paragraph (5)
    Subparagraph a
    “Producing provinces” refer to provinces that produce natural gas based on the criteria stipulated by the minister in charge of Governmental Affairs in the oil and gas mining sector.
    Subparagraph b
    Sufficiently clear.
    Subparagraph c
    Sufficiently clear.
    Article 118
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Subparagraph a
    Sufficiently clear.
    Subparagraph b
    “Producing regencies/municipalities” refer to regencies/municipalities constituting a geothermal working area.
    Subparagraph c
    Sufficiently clear.
    Subparagraph d
    Sufficiently clear.
    Subparagraph e
    “Processing regencies/municipalities” refer to regencies/municipalities where geothermal is processed and are at risk of being affected by negative externalities.
    Article 119
    Sufficiently clear.
    Article 120
    The fraction of 90% (ninety per cent) of DBH SDA includes that intended for:
    a.
    other regencies/cities in the same province;
    b.
    regencies/municipalities that are directly adjacent to either the same or different provinces;
    c.
    processing regencies/municipalities;
    taking into account, among others, the impact of externalities.
     
    Local Governments’ performance is the performance of Local Governments in supporting, among others, the optimisation of state revenues, such as central taxes and non-tax state revenues and/or environmental maintenance performance, such as environmental management and eco-friendly energy.
    Article 121
    Sufficiently clear.
    Article 122
    Sufficiently clear.
    Article 123
    Paragraph (1)
    Other types of DBH may include revenue sharing related to oil palm plantations.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Article 124
    Paragraph (1)
    The calculation of the need for public services also considers the funding synergy for the administration of affairs between the Government and the Regions.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    “Certain characteristics” refers to local characteristics, such as geographic location and Local economy.
    Article 125
    Paragraph (1)
    DAU = Fiscal Gap (CF)
    Paragraph (2)
    Fiscal Gap (CF) = Fiscal Needs – Local revenue potential.
    Paragraph (3)
    The calculation of the basic needs for the administration of government takes into account, among others, the need for state civil servants’ salaries, either civil servants or PPPK.
    Paragraph (4)
    For provinces, PAD does not include PAD shared with regencies and municipalities and for regencies and municipalities, it includes PAD shared from the provinces. The non-physical DAK allocations that are taken into account include the education and health sectors.
    Article 126
    Paragraph (1)
    The number of service target units is obtained from the Government statistical agency and/or Government agencies authorised to publish data.
    Paragraph (2)
    “Investment costs” refer to the average of 3 (three) years of Local Expenditure for certain sectors divided by the average of 3 (three) years of service targets.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Local characteristics are, for example, Regions with archipelagic characteristics and Regions with certain economic bases, such as the tourism sector or the agriculture and fishery sectors that support food security.
    Article 127
    Sufficiently clear.
    Article 128
    Paragraph (1)
    Province DAUi = Province Weighti 𝑥 the amount of Province DAU in the province group.
    Paragraph (2)
    where
    Province CF
    =
    Fiscal Gap for the provincei.
    ΣProvince CF
    =
    the amount of Fiscal Gap of all provinces in the province group
    Article 129
    Paragraph (1)
    Regency/Municipal DAUi = Regency/Municipal Weighti 𝑥 the amount of Regency/Municipal DAU in the Regency/Municipal group.
    Paragraph (2)
    Regency/Municipal CFi
    =
    Fiscal Gap for the regency/municipali.
    Regency/Municipal CF
    =
    the amount of Fiscal Gap of all regencies/municipalities in the regency/municipal group
    Regency/Municipal CFi
    =
    Fiscal Gap for regency/muncipali.
    ΣProvince CF
    =
    the amount of Fiscal Gap of all provinces in the province group.
    Article 130
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    For Regions that do not receive DAU allocations, the support for the development of facilities and infrastructure as well as community empowerment in sub-districts is calculated from DBH allocations.
    Article 131
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    The synergy of DAK with other funding aims to support the achievement of certain programs, activities and/or policies.
     
    Other funding may be sourced from other TKD, Local Debt Financing, APBD, the cooperation between the government and business entities, inter-Local cooperation and ministry/agency expenditures.
     
    Expenditures of ministries/agencies that continue to fund local affairs are transferred to DAK in the event that the Regions have performed well in the management of APBD.
    Paragraph (5)
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear.
    Paragraph (7)
    Sufficiently clear.
    Article 132
    Paragraph (1)
    Special Autonomy Fund is aimed at supporting the implementation of special autonomy pursuant to statutory provisions.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Article 133
    Paragraph (1)
    Privilege Fund is aimed at supporting the administration of the privileges of the Special Region of Yogyakarta pursuant to statutory provisions.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Article 134
    Paragraph (1)
    Village Fund is aimed at supporting the governance, development, community and society empowerment under the authority of villages.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Article 135
    Sufficiently clear.
    Article 136
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    “Location” refers to the location of forest concessions, mines, crude oil or natural gas wellheads and/or geothermal working areas constituting the basis to stipulate natural resource-producing Regions.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 137
    Paragraph (1)
    “Allocated independently” refers to the TKD allocation in its status as a new autonomous region of which the calculation complies with the formula stipulated under statutory provisions on TKD.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    “Location” refers to the location of forest concessions, mines, crude oil or natural gas wellheads and/or geothermal working areas constituting the basis to stipulate natural resource-producing Regions.
    Paragraph (5)
    Sufficiently clear.
    Article 138
    Paragraph (1)
    TKD may be distributed directly to the beneficiary’s account, such as villages and/or schools. In the event that TKD is distributed with this mechanism, the said transaction remains recorded in APBD.
    Paragraph (2)
    In the context of effective and efficient government cash management, distribution is carried out in an integrated Local cash management scheme. This may be carried out through the use of certain accounts managed by the Government representing the cash accounts of each Region.
    Article 139
    Sufficiently clear.
    Article 140
    Sufficiently clear.
    Article 141
    Sufficiently clear.
    Article 142
    Sufficiently clear.
    Article 143
    Sufficiently clear.
    Article 144
    Sufficiently clear.
    Article 145
    Paragraph (1)
    Expenditure allocation to fund certain Local Governmental Affairs, the amount of which has been stipulated pursuant to statutory provisions, such as education budget, health budget and village fund allocation.
    Paragraph (2)
    Sufficiently clear.
    Article 146
    Paragraph (1)
    Local personnel expenditures include state civil officers, Head of the Region and DPRD members. Local personnel expenditures in this paragraph do not include expenditures for additional teacher income, special teacher allowances, teacher professional allowances and other similar allowances sourced from TKD with specified use.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Article 147
    Paragraph (1)
    “Public service infrastructure expenditures” refer to local infrastructure expenditures directly related to the acceleration of development and/or maintenance of public service facilities oriented towards Local economic development in the context of increasing job opportunities, reducing poverty and reducing gaps in the provision of inter- Local public services.
     
    “Revenue sharing expenditures and/or transfers to Regions and/or villages” refer to revenue sharing expenditures and/or mandatory transfers pursuant to statutory provisions, among others, revenue sharing of provincial Taxes to regencies/municipalities, revenue sharing of regency/municipality Taxes and User Charges villages and transfers to villages sourced from Village Fund and allocation of village funds.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Article 148
    Sufficiently clear.
    Article 149
    Sufficiently clear.
    Article 150
    Sufficiently clear.
    Article 151
    Sufficiently clear.
    Article 152
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    “In certain cases” refers to the context of carrying out the President’s directives for national strategic interests and providing cross-sectoral input.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Article 153
    Sufficiently clear.
    Article 154
    Paragraph (1)
    Sufficiently clear
     Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Paragraph (6)
    Sufficiently clear.
    Paragraph (7)
    “In certain cases” refers to an emergency that causes the estimated Local income to decrease by a minimum of 20% (twenty per cent) of APBD.
    Paragraph (8)
    Sufficiently clear.
    Article 155
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    “Banking financial institutions or non-banking financial institutions” refer to financial institutions deemed capable by the Minister.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 156
    Sufficiently clear.
    Article 157
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    The proceeds from sales of Local Government Bonds and Regional Sharia Bonds are used to finance public sector investments that generate revenues and/or benefit the people.
    Paragraph (4)
    Sufficiently clear.
    Paragraph (5)
    Sufficiently clear.
    Article 158
    Paragraph (1)
    The basis for the issuance of Regional Sharia Bonds is not intended to guarantee the issuance of Regional Sharia Bonds.
    Paragraph (2)
    “Other than land and/or buildings” may be in the form of tangible goods or intangible goods that have economic value and/or have cash inflows.
    Paragraph (3)
    Sufficiently clear
     Article 159
    Sufficiently clear.
    Article 160
    Sufficiently clear.
    Article 161
    Sufficiently clear.
    Article 162
    Paragraph (1)
    “TKD funds with unspecified use” refer to DAU and/or DBH with unspecified use pursuant to statutory provisions.
    Paragraph (2)
    Sufficiently clear.
    Article 163
    Sufficiently clear.
    Article 164
    Sufficiently clear.
    Article 165
    Paragraph (1)
    Sufficiently clear.
    Paragraph (2)
    “Investments that are free from impairment risk” refer to the placement of funds in financial instruments offered by financial institutions whose credibility has been recognised, thereby, the principal/initial value of the investments is not affected by fluctuations in the money market/capital market; fluctuations will only affect the yields.
     
    Examples of placements with such criteria are investments in Government Securities until maturity or not realising losses at the time of sale as well as deposits in healthy banks.
    Paragraph (3)
    Sufficiently clear.
    Article 166
    Sufficiently clear.
    Article 167
    Sufficiently clear.
    Article 168
    Sufficiently clear.
    Article 169
    Paragraph (1)
    The said synergy in the context of supporting integrated central and Local fiscal management includes refocusing, adjusting Local and central expenditures, supporting anti-cyclical policies as well as aligning national fiscal policies and national development achievement targets.
    Paragraph (2)
    Sufficiently clear.
    Article 170
    Sufficiently clear.
    Article 171
    Sufficiently clear.
    Article 172
    Sufficiently clear.
    Article 173
    “An emergency” refers to deteriorating macroeconomic and financial conditions resulting in functions and roles of APBN and APBD not running effectively and efficiently, among others:
    a.
    economic growth projections that are significantly below the assumptions and deviations of other basic macroeconomic assumptions;
    b.
    a significant projected decrease in state/Local revenues and/or increase in state/Local expenditures; and/or
    c.
    threat that endangers the national economy and/or financial system stability.
    Article 174
    The standard chart of accounts synergy refers to synergy and integration efforts between the standard chart of accounts in the Government and Local Governments.
    Article 175
    Sufficiently clear.
    Article 176
    Consolidation of Local Governments’ financial information includes financial information, performance information, public information, executive information and other related information, including Local Governments’ transaction data, aligned with the standard chart of account for Local Governments integrated with the standard chart of account for the Central Government, to nationally establish financial statistics and aligned and consolidated financial statements that include planning, budgeting, budget implementation and reporting.
    Article 177
    Other information includes personnel information and procurement services of goods and services.
    Article 178
    Sufficiently clear.
    Article 179
    Paragraph (1)
    The implementation of Monitoring and evaluation of TKD Implementation and APBD implementation shall at least focus on i) the implementation of mandatory spending, such as spending on education, health and infrastructure; ii) Local Financial liquidity; iii) SiLPA; and iv) monitoring and evaluation of the output achievement for national and Local priority programs.
    Paragraph (2)
    Sufficiently clear.
    Paragraph (3)
    Sufficiently clear.
    Article 180
    Sufficiently clear.
    Article 181
    Sufficiently clear.
    Article 182
    Sufficiently clear.
    Article 183
    Sufficiently clear.
    Article 184
    Sufficiently clear.
    Article 185
    Sufficiently clear.
    Article 186
    Sufficiently clear.
    Article 187
    Sufficiently clear.
    Article 188
    Sufficiently clear.
    Article 189
    Sufficiently clear.
    Article 190
    Sufficiently clear.
    Article 191
    Sufficiently clear.
    Article 192
    Sufficiently clear.
    Article 193
    Sufficiently clear.
       
    SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6757
     
     
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    Law - 1 TAHUN 2022 - Perpajakan DDTC