Gov’t to Provide Fiscal Instrument to Boost Tourism in Regions

Minister of Finance Sri Mulyani holds a press conference after attending a Limited Cabinet Meeting at the Presidential Office, Jakarta, Tuesday (25/2). Photo by: Jay/PR

In a bid to boost tourism in regions, the Government will convert Rp147 billion Special Allocation Fund (DAK) for tourism infrastructure available in State Budget to grants for regional governments, Minister of Finance Sri Mulyani has said.

“The fiscal policy aims to attract international and domestic tourists,” the Minister said after attending a Limited Cabinet Meeting at the Presidential Office, Jakarta, Tuesday (25/2).

Sri Mulyani added that the Government will also provide tax-exempt for hotels and restaurants for 6 months, and will provide compensation for regional governments.

“We hope (the policy) will be able to improve tourism and support economic activities in communities,” she added.

Sri went on to say that the fiscal stimulus can be provided because there are reserve fund available in the 2020 State Budget aimed to overcome unexpected financial need. The fiscal policy is made to address the latest issues, including the impact of the global outbreak of coronavirus to Indonesia’s economy.

On the occasion, the Minister of Finance also explained that relations between Central Government and regional governments in terms of financial obligation are stipulated in Laws.

“Transfer payment to the regions, especially the General Allocation Funds (DAU) in the forms of grants and block grants, is transferred directly to the regions. Once the fund is transferred, it will be under the authority of the regional governments,” Sri Mulyani said, adding that the regional governments should take into account time value of money in spending the fund.

“The average number for revenue in regional budget consists of 20% regional revenue (PAD) and 80% transfer from Central Government, although some regions have higher regional revenue.

The Minister further said that formula for fiscal instrument, including General Allocation Fund (DAU), Revenue Sharing (DBH) and village fund are stipulated by Laws.

While the Government issued the fiscal policy, Sri Mulyani added, the central bank Bank Indonesia has issued monetary policy in the forms of a reduction in interest rates and measures to relax liquidity.

“The President has said that the fiscal instrument is made to support consumption and investment as well as to boost tourism sector,” Sri Mulyani said. (MAY/EN)

Translated by: Ridwan Ibadurrohman
Reviewed by: Yuyu Mulyani