Tito Reveals Rp70 Trillion Revenue Sharing Underpayment Could Solve Regional PPPK Salary Issues

The Minister of Home Affairs, Tito Karnavian, has revealed that the distribution of Revenue Sharing Funds (DBH), which currently has an underpayment of Rp70 trillion, could serve as a solution for Local Governments (Pemda) facing difficulties in paying civil servant salaries, including Government Employees with Work Agreements (PPPK).

Tito stated that according to 2024 data, the DBH underpayment reaches approximately Rp83 trillion. This figure consists of tax-related DBH of around Rp43 trillion and natural resource-related DBH of approximately Rp40 trillion. After accounting for an overpayment of Rp13 trillion, the net underpayment stands at roughly Rp70 trillion. This amount is currently ‘stuck’ and affects 31 provinces, 317 regencies, and 83 cities.

“This Rp70 trillion affects 31 provinces, 317 regencies, and 83 cities that have not been paid or are underpaid. If this is paid out, the PPPK salary issues in most of these regions will be resolved,” Tito said during a working meeting with Commission II of the House of Representatives (DPR RI) on Thursday.

Furthermore, Tito presented a solution for regions that do not have entitlements to DBH underpayments. He explained that the government will prepare a mechanism to top up the General Allocation Fund (DAU). He clarified that this top-up scheme will be provided if the Local Government has implemented necessary efficiencies. He confirmed that this scheme has been agreed upon between himself and the Minister of Finance.

“However, there are regions where there is no DBH, and even after efficiencies have been made, we know there is no other way but through a DAU top-up. This scheme has been prepared by the Minister of Finance. Therefore, it is hoped that the PPPK issue can be overcome,” he added.