Gov’t Gives Relaxation for Regional Governments to Distribute Revenue Sharing Funds

Types of Revenue Sharing Funds. (Source: Ministry of Finance)

Ministry of Finance has announced it will provide relaxation for regional governments in distributing revenue sharing funds (DBH) for the current year and the 2019 DBH underpayment for the handling of COVID-19.

The measure, it said, is aimed at protecting the regions from economic repercussions due to the pandemic.

DBH facilities for regional governments are allocated based on the portion of adjusted state revenue plans generated according to economic development.

Some of the DBH is used for COVID-19 handling, including infrastructure spending accounting for 25% of the General Transfer Fund (DTU), both the health sector, social safety net (JPS), and other urgent spending.

A maximum of the remaining 25% DBH of the Forestry Natural Resources (SDA) Forest Reforestation Fund can also be used for COVID-19 handling and/or to anticipate economic threats to the country/region.

Procedure for DBH distribution for the relaxation of the current year is as follows.

Director General of Fiscal Balance submits a proposal for relaxation to Minister of Finance. Once approved, the relaxation is stipulated in a Decree of Minister of Finance (KMK).

Meanwhile, the relaxation for the 2019 DBH Underpayment, Minister of Finance may determine the temporary allocation of the 2019 DBH Underpayment based on the prognosis of the realization of state revenue generated.

Should the Inspection Report (LHP) of the Central Government Financial Report (LKPP) is available, definitive Underpayment is determined. After the establishment of a temporary and/or definitive allocation, the DBH Under payment may be distributed.

Reconciliation of regional governments, the State Treasury Services Office (KPPN), tax office (KPP) as DBH Tax requirements are made online.

The COVID-19 prevention and/or handling reports such as health performance reports, social assistance reports are the requirement in the report of the DBH distribution for Q2 and Q3 and at the same time replace the regional governments’ performance reports in managing environmental sanitation.

Submission of the distribution requirements is made in softcopy. (Ministry of Finance PR/EN)

Translator: Muhardi
Reviewed by: M. Ersan Pamungkas