Govt formulates guidelines for revenue distribution

JAKARTA (JP): The government's special team is formulating guidelines on the distribution of state revenues from natural resources among regencies, provinces and the central government.

Minister of Mines and Energy Susilo Bambang Yudhoyono said here on Tuesday that the guidelines would serve as an integral part of the intergovernmental fiscal balance law, which would be enforced next year.

"The guidelines are needed to provide legal references on how provincial administrations will benefit from their natural resources," he said in a hearing with the House of Representatives Commission VIII for mines and energy.

The intergovernmental fiscal balance law is one of two legislations which will be introduced next year as part of an effort to give more autonomy to provincial administrations to manage their own financial resources and political affairs. The other one is the law on regional government.

According to the intergovernmental fiscal balance law, the regional governments are entitled to receive 15 percent of the regional revenue from oil, while the remaining 85 percent of it has to go to the central government.

Three percent of the 15 percent should go to the provincial government, six percent for the regency where the natural resources are located, and the remaining six percent for all the other regencies in the province, said Susilo quoting the law.

For gas revenues, according to Susilo, the distribution was 30 percent of the proceeds to go to regional governments and the remaining 70 percent to the central government.

Unlike the oil and gas revenue distribution, most of revenues from the mining sector including mineral, precious metal and coal should go the regional governments.

"The regional government gets 80 percent of the revenue while the remaining 20 percent goes to the central government," he said.

Susilo said that some of the authority in the mines and energy sector, according to the above autonomy laws, would be transferred to the regional governments.

He said however there were obstacles which needed to be solved quickly regarding the transferring of authority from the central to the regional governments.

There were a number of cases where the regency and the provincial governments were still in conflict on the implementation of the autonomy laws, said Susilo.

Some regional governments had gone ahead with creating their own new regulations on the mines and energy sector, to precede the central government completing the mines and energy guidelines for the regional government regulations, Susilo added.

"The central government guidelines are needed to resolve the differing perceptions among the regions across Indonesia about how to manage mining and energy industry," Susilo said.(udi)