Jakarta (ANTARA) - The wave of criticism levelled by most regional\ngovernments at the Finance Ministry\u2019s policy of significantly reducing\nrevenue-sharing funds (DBH) for the 2026 fiscal year is entirely\nunderstandable.<\/p>\n
Total regional transfer spending (TKD) for 2026 is set at Rp692.99\ntrillion, down 24.6 per cent from Rp919.8 trillion the previous year,\nwith the DBH component bearing the deepest correction in history, at\naround 69.5 per cent.<\/p>\n
The impact is keenly felt: East Kalimantan faces potential cuts of up\nto 75 per cent, central transfers to South Kalimantan have shrunk from\nRp4.5 trillion to Rp2.2 trillion, and DKI Jakarta has been forced to\nrevise its regional budget from Rp95 trillion to Rp79 trillion after its\nDBH projection was cut from a target of Rp15 trillion to around Rp11\ntrillion.<\/p>\n
In this context, the first point I wish to convey is that the public\nand regional governments need to understand the fundamental character of\nDBH. Unlike the general allocation fund (DAU), a block grant designed to\nclose fiscal gaps between regions, DBH is conceptually a revenue-sharing\ninstrument whose amount is directly tied to realised state revenue from\nspecific sources, ranging from taxes, oil and natural gas, minerals and\ncoal, forestry, to excise on tobacco products.<\/p>\n
When revenue from these sources weakens due to external pressures\n(such as when the rupiah touched Rp18,000 per US dollar in June 2026),\nthe prices of several global commodities automatically soften, and\nrealised tax revenue is almost certainly below the initial assumptions\nmade before the crisis occurred.<\/p>\n
This condition provides the normative basis for the possibility that\nthe DBH distributed to regions will shrink. This phenomenon can be seen\nas the mathematical consequence of how the revenue-sharing mechanism\nitself works, as it is indeed designed to follow the fluctuations of\nactual state revenue.<\/p>\n
The legal basis for this policy is also clear. Law Number 17 of 2025\non the 2026 State Budget stipulates that DBH disbursement refers to the\nrealisation of state revenue shared in the current year. This provision\naligns with the constitutional duty of the Finance Minister, as the\nstate\u2019s general treasurer, to keep the budget deficit at a safe\nlevel.<\/p>\n
In the 2026 State Budget posture itself, the deficit is designed at\n2.68 per cent of GDP, below the 3 per cent ceiling required by Law\nNumber 17 of 2003 on State Finances. This discipline is indeed painful\nfor regions in the short term, but it is a prerequisite for maintaining\nrupiah stability, inflation control, and financial market\nconfidence.<\/p>\n
It should also be underlined that the DBH \u2018underpayment\u2019 mechanism\noccurring this year is nothing new, nor is it outside the law.\nProvisions governing the determination and settlement of DBH\nunderpayments and overpayments have long been regulated through finance\nminister regulations and have been a routine part of the fiscal transfer\ncycle for years, long before this year\u2019s fiscal pressures emerged.<\/p>\n
The Finance Ministry has also shown its commitment to settling these\nobligations gradually as fiscal space becomes available, such as the\ndisbursement of DBH underpayments to several regions, including Maluku\nProvince, in August 2026.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/finding-middle-ground-in-the-revenue-sharing-fund-row-1789444449", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }