Govt formulates guidelines for revenue distribution

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)