Gov’t Provides Fiscal Incentive to Tackle Inflation

Minister of Home Affairs Tito Karnavian symbolically hands over fiscal incentive to regional governments, in Jakarta (08/05). (Photo by: PR of Ministry of Finance)

The Government has disbursed fiscal incentive to regional governments succeeding in controlling inflation in regions.

The ceremony of the fiscal incentive disbursement was held in Jakarta, Monday (08/05), attended by Minister of Home Affairs Tito Karnavian and Vice Minister of Finance Suahasil Nazara.

“For the fiscal incentive, we use some criteria, including controlling regional inflation. For regional governments that are able to maintain inflation in a relatively low level, the fiscal incentive will be disbursed using the current budget year,” Vice Minister of Finance said.

For the record, the Government has designed regional incentive funds for cities, regencies, and provinces since 2023.

Suahasil emphasized that synergy and collaboration between the Central Government and regional governments are important in controlling inflation. The Central Government, he added, has provided various programs to maintain overall prices, including by providing subsidies and compensation, while regional governments have an important role in directly monitoring price on the ground and the availability of goods on the market.

“We urge Governors, Regents and Mayors to review the Regional Budget to ensure that the Budget is spent to generate economic growth in their respective regions. Good economic growth will provide benefits in increasing purchasing power and increasing the income of our people,” he said.

The Vice Minister also expressed hope that regional heads will pay attention to business entities in their respective regions, especially those carrying out production processes and creating goods and services, to ensure that the business entities provide jobs.

For the record, more regions receive fiscal incentive allocations to control inflation this year than the regions receiving it in the previous year. In 2023, there were 33 regional governments receiving fiscal incentive, while in 2024, the recipients are 50 regional governments. Of the 50 recipients, 36 of them (72%) are regions that have never previously received the incentive in the inflation control category. (Public Relations Ministry of Finance/UN) (RI/LW)