Decentralization of Forest Administration in Indonesia, Implications ...

Ida Aju Pradnja Resosudarmo, Christopher Barr, Ahmad Dermawan, and John McCarthy 67
entitles that province to receive 55% of petroleum taxes and 40% of natural gas
taxes (as compared to the standard 15% and 30%, respectively, that other provinces
receive). Law 21/2001 on Special Autonomy for Papua gives that province 70% of
both petroleum and gas taxes (see Box 4.1).
Table 4.3: Revenue Sharing Among Central, Provincial, and District/Municipality
Governments Under Law 25/1999 on Fiscal Balancing and its implementing
regulation (by percentage)
Revenue Source
Originating
Central Provincial
District or
Government Government
Municipality
Other Districts and
Municipalities in
the Same Province
All Districts and
Municipalities in
Indonesia
Oil 85 3 6 6 0
LNG 70 6 12 12 0
Mining: Land-rent 20 16 64 0 0
Mining: Royalty 20 16 32 32 0
Forestry: IHPH 20 16 64 0 0
Forestry: PSDH 20 16 32 32 0
Fishery 20 0 0 0 80
Land and Building
Tax
9 16.2 64.8 0 10
Land/Building
Transfer Fee
0 16 64 0 20
Personal Income
Tax
80 8 12 0 0
Sources: World Bank 2003 (citing Law 25/1999; Government Regulation 104/2000; and Bambang
Brodjonegoro 2001).
Note:
a. Under special autonomy arrangements, the provincial government of Nanggroe Aceh Darussalam
receives 55% of oil taxes and 40% of LNG taxes; the provincial government of Papua receives 70% of
oil taxes and 70% of LNG taxes.
b. Under Law 33/2004, the share of oil revenue has been changed so that as of 2009, the center would
receive 84.5% and 69.5% of oil and gas revenues, respectively, while the share of the regions remain the
same. The difference of 0.5% of the oil and gas revenues will be allocated for basic education, in which
the province will receive 0.1%, originating district 0.2% and other district within province 0.2%.
c. Under Law 33/2004, Reforestation Fund (Dana Reboisasi, DR) is categorized as shared revenues. The
center would receive 60% and originating region would receive 40%.
Regionally-Generated Revenues – PAD
The fiscal balancing law emphasizes that under decentralization, regional governments
at the provincial, district, and municipal levels will be responsible for securing a
significant portion of their income from regionally-generated revenues (commonly
referred to by its Indonesian acronym, PAD, for Pendapatan Asli Daerah). Broadly
defined, this category refers to sources of revenue that a regional government can
directly obtain from within its own jurisdiction, as opposed to transfers from the
national government or loans from external sources. Law 25/1999 identifies three
main types of PAD, including revenues from: regional taxes; regional levies (i.e. fees
and surcharges); and regional government enterprises (Badan Usaha Milik Daerah,
BUMD).