LAW OF THE REPUBLIC OF INDONESIA PRESIDENT OF ... - …

LAW OF THE REPUBLIC OF INDONESIA NUMBER 27 OF 2014

ON

STATE BUDGET FOR FISCAL YEAR 2015 BY THE GRACE OF GOD ALMIGHTY

PRESIDENT OF THE REPUBLIC OF INDONESIA, Considering : a. that the State Budget as a manifestation of public

financial management is carried out in transparent and accountable for the greatest prosperity of the people;

b. that the Draft State Budget for Fiscal Year 2015 contained in the Bill on Budget and Expenditures for Fiscal Year 2015 are arranged according to the needs of the state government administration and the ability to raise state revenues in order to support the realization of national economy based on economic democracy with the principles of togetherness, efficiency, justice, sustainability, environmentally sound, independence, and maintain progress balance and the unity of national economy;

c. that in the discussion of the Bill on State Budget for Fiscal Year 2015, the House of Representatives and the Government has been considering the recommendations of the Board of the Regional Representative Council contained in Decree No. 78 / DPD / IV / 2013-2014 dated September 2, 2014;

d. that based on the considerations set forth in letters a, b, and c, and to implement the provisions of Article 23 paragraph (1) of the Constitution of the Republic of Indonesia Year 1945, it should establish the Law on State Budget for Fiscal Year 2015;

Given : 1. Article 5 paragraph (1), Article 20 paragraph (2) and paragraph (4), Article 23 paragraph (1) and paragraph (2), Article 31 paragraph (4), and Article 33 paragraph (1), paragraph (2), paragraph (3), and paragraph (4) of the Constitution of The Republic of Indonesia Year 1945;

2. Law No. 17 of 2003 on State Finance (State Gazette

COPY

of the Republic of Indonesia Year 2003 Number 47, Supplement to State Gazette of the Republic of Indonesia Number 4286);

3. Law No. 17 of 2014 on the People's Consultative Assembly, House of Representatives, Regional Representatives Council, and the Regional House of Representative Council (State Gazette of the Republic of Indonesia Year 2014 Number 182, Supplement to State Gazette of the Republic of Indonesia Number 5568);

With mutually agreement between HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA

and PRESIDENT OF THE REPUBLIC OF INDONESIA

HAS DECIDED:

Stipulate : LAW ON STATE BUDGET FOR FISCAL YEAR 2015 Article 1

In this Law, what is meant by: 1. State Budget hereinafter abbreviated to as ABPN,

the annual financial plan state government approved by the House of Representatives.

2. State Revenue is the right of central government recognized as an addition to net assets consisting of Tax Revenue, Non-Tax Revenue and Grant Revenue.

3. Tax Revenue are all government receipt consisting of Domestic Tax Revenue and International Trade Tax Revenue.

4. Domestic Tax Revenue is all government receipt derived from the income tax, value added tax of goods and services revenue, sales tax on luxury goods revenue, property tax revenue, customs revenue and other tax revenues.

5. International Trade Tax Revenue is all government receipt from customs duties and export duties revenue.

6. Non-Tax Revenues, hereinafter abbreviated to as PNBP, are all Central Government receipt received in the form of revenues from natural resources, the share of profits revenue of State Owned Enterprises (SOEs), other PNPB, and revenues from Public Service Agency (BLU).

7. Grant Revenue are all government receipt either in the form of foreign exchange and/or foreign exchange denominated in rupiah, rupiahs,

services, and/or securities acquired from grantors who do not have to be repaid and are not binding, both from domestic and from abroad.

8. Government Expenditure is the obligation of Central Government which is recognized as a reduction of net worth value consists of Central Government expenditure and transfer to Local and Village Fund.

9. Central Government Expenditure According to Organization is Central Government expenditure allocated to the State Ministry / Agency and the State Treasurer Budget Section.

10. State Treasurer Budget Section, hereinafter abbreviated to as the BA-BUN, is part of the budget managed by the Ministry of Finance as fiscal manager.

11. Central Government Expenditure According to Function is Central Government expenditure that is used to run the public service function, defense function, public order and safety functions, economic function, environmental function, housing and public facilities function, health function, tourism function, religious function, educational function, and social protection function.

12. Central Government Expenditure According to Program is Central Government expenditure allocated to achieve specific outcomes in the Ministry / Agency.

13. Subsidy Management Program is provision of support in the form of budget allocations to the state enterprises, government agencies, or third parties based on the laws and regulations that apply to the supply of goods or services that are strategic or dominate the life of the people according to the ability of state finances.

14. Transfer to Region is the part of State Expenditure in order to fund the implementation of fiscal decentralization in the form of fiscal balance transfer, special autonomy funds, funds privilege of DI Yogyakarta, and other transfers of funds.

15. Fiscal balance transfer is funds sourced from state revenue allocated to the regions to finance the region in implementation of decentralization, which consists of revenue-sharing fund, general allocation fund, and special allocation fund.

16. Revenue-Sharing Fund, hereinafter abbreviated to as DBH, is the fund sourced from state revenues

allocated to the regions at a certain percentage to fund the needs of the regions in the implementation of decentralization.

17. General Allocation Fund, hereinafter abbreviated to as DAU, is the fund sourced from state revenues allocated to the regions with the aim of inter-regional equity of financial ability to fund the needs of the region in the implementation of decentralization.

18. Special Allocation Fund, hereinafter abbreviated to as DAK, is the fund sourced from state revenues allocated to a particular region with the aim to help fund the special activities of regional affairs and in accordance with national priorities.

19. Special Autonomy Fund is the fund allocated to fund for the implementation of special autonomy in such region, as stipulated in Law No. 35 of 2008 on Government Regulation in Lieu of Law No. 1 of 2008 on the Amendment of Law No. 21 of 2001 on Special Autonomy for Papua Province into Law, and Law No. 11 2006 on the Government of Aceh.

20. Privileges Fund for Special Region of Yogyakarta is the fund allocated for the implementation of privilege affairs of Yogyakarta Special Region, as defined in the Law No. 13 of 2012 on the Privileges of Yogyakarta Special Region.

21. Other Transfer Fund is the fund allocated to assist the Regions in order to implement certain policies in accordance with the Provisions of Legislation.

22. Village Fund is the fund from the State Budget dedicated for the Village which is transferred through the Local Budget of district/city and is used to finance the government administration, the implementation of development, social development, and community empowerment.

23. Budget Financing is any admission that needs to be repaid back, return receipts over expenditure of previous financial years, return expenditures over revenues of previous financial years, the use of accumulated budget surplus, and/or return receipts of expenditure, either in the current or subsequent fiscal years.

25. Domestic Financing is all receipts financing from domestic banking and non-banking, which consists of installment receipts of subsidiary loan mechanism, accumulated budget surplus,

the results of asset management, the issuance of net government securities, net domestic loan, minus financing expenses, which includes allocations for, state capital investment, revolving funds, obligations arising from the Government guarantee, and the reserve financing for the development of national education fund.

25. Financing Surplus, hereinafter abbreviated as to SiLPA, is the surplus of budget financing outcomes over realization of budget deficits outcomes that occurred within one reporting period.

26. Accumulated Budget Surplus, hereinafter abbreviated to as SAL, is a net accumulation of SiLPA and Minus Financing (SiKPA) for the previous fiscal years and the relevant fiscal year after closing, plus/minus with bookkeeping correction.

27. Government Securities hereinafter abbreviated to as SBN including government bonds and state sharia bond.

28. Government Bonds hereinafter abbreviated to as SUN, is a securities in the form of debt instruments denominated in rupiah and foreign currency which their payment of interest and principal are guaranteed by the Republic of Indonesia in accordance with the validity period.

29. State Sharia Bond, hereinafter abbreviated to as SBSN or it can be called as sukuk, is SBSN issued based on sharia principles, as evidence for the delivery of SBSN assets, both in rupiah and foreign currency.

30. Project Based Sukuk/PBS hereinafter abbreviated to as SBSN PBS is a source of funding through the issuance of SBSN to finance certain activities carried out by the Ministry / Agency.

31. Undetermined Status of Government Assistance Settlement Yet hereinafter abbreviated to as BPYBDS, is government assistance in the form of State Owned Assets from the state budget, which has been operated and/or used by SOEs based on the Document Handover Official Report and so far recorded in the financial statements of the State Ministry/Agency or the SOE.

32. Government Investment Fund is Government investment fund allocation to Government Investment Center, state capital investment,

and/or capital strengthening grant with its revolving distribution in nature, which is performed to generate economic benefits, social, and/or other benefits.

33. State Capital Investment, hereinafter abbreviated to as PMN, is State Budged funds allocated into separate state assets or determination of the company reserve or other sources to serve as the capital of SOEs and/or other limited liability and corporation managed, including capital investment in the organization/international financial institutions and other state capital investment.

34. Revolving Fund is the fund managed by a particular BLU for loan and revolved out to the community /institutions with the aim to improve people's economic and other purposes.

35. Domestic Loan is any loan by the Government obtained from domestic lenders to be paid back with certain requirements, in accordance with the validity period.

36. Guarantor liabilities are liabilities that are potentially be borne by the Government as a result of the provision of guarantees to BUMN and/or regional-owned enterprises (BUMD) in the case of BUMN and/or BUMD is unable to pay its obligations to creditors in accordance with loan agreement or purchase agreement in the Government cooperation project with business entities in the provision of infrastructure.

37. Net Foreign Financing is all financing derived from the withdrawal of foreign loans comprising the loan program and project loans and reduced the subsidiary loan mechanism and principal repayments of foreign debt.

38. Loan Program is foreign loan received in cash which it redeemed requires adherence to certain conditions agreed by both parties that are the Government and the Lender, such as matrix policy or implementation of certain activities.

39. Project Loan is foreign loan used to finance certain activities of State Ministry/Agency, including on-lent loans and/or on-granted grant to local governments and/or SOE.

40. Subsidiary Loan Mechanism is foreign loan or domestic loan received by the Central Government on-lent to local governments and/or SOE to be repaid with specific terms and

conditions. 41. Education Budget is the budget allocation to the

education function is budgeted through the State Ministry/Agency, budget allocation for education is through the transfer of funds to the regions and villages, and the budget allocation for education through financing expenses, including salaries of educators, but not including service education budget, to finance provision of education that is the Government responsibility.

42. Percentage of Education Budget is the ratio of total education budget allocation from the state budget.

43. Fiscal Year 2015 was a period of 1 (one) year commencing from January 1 through December 31, 2015.

Article 2

State Budget consists of the State Revenues budget, the Government Expenditure and Financing Budget.

Article 3 State Budget for Fiscal Year 2015 is planned for IDR 1,793,588,917,577,000.00 (one quadrillion seven hundred and ninety-three billion five hundred and eighty-eight billion, nine hundred and seventeen million five hundred and seventy-seven thousand rupiahs), which is obtained from sources: a. Tax Revenue; b. PNBP; and c. Grant Revenue.

Article 4 (1) Tax Revenue as referred to in Article 3 letter a, is

planned for IDR 1,379,991,627,125,000.00 (one quadrillion three hundred and seventy-nine billion, nine hundred and ninety-one billion six hundred and twenty-seven million, one hundred twenty-five thousand rupiahs), which consists of: a. Domestic Tax Revenue; and b. International Trade Tax Revenue.

(2) Domestic Tax Revenue as referred to in paragraph (1) letter a, is planned for IDR 1,328,487,827,125,000.00 (one quadrillion three hundred and twenty-eight billion four hundred and eighty-seven billion, eight hundred and twenty-seven million one hundred and twenty twenty-five thousand rupiahs), which consists of:

a. income tax revenue; b. value add tax of goods and services and sales

tax on luxury goods revenue; c. land and building tax revenue; d. excise revenue; and e. other tax revenue.

(3) Income Tax Revenue as referred to in paragraph (2) letter a, is planned for IDR 644,396,122,950,000.00 (six hundred and forty-four billion three hundred and ninety-six billion, one hundred and twenty-two million nine hundred and fifty thousand rupiahs) therein, including Government– borne income tax (PPh DTP) over: a. geothermal commodities of IDR

1,750,000,000,000.00 (one billion seven hundred and fifty billion rupiahs) including DTP PPh for the deficiency in 2012-2013 of IDR 625,400,000,000.00 (six hundred and twenty-five billion four hundred million rupiahs) in which its implementation is set in the Minister of Finance; and

b. interests, yield, and third-party income for services provided to the Government in the issuance and/or repurchase/redemption of SBN in the international market, but it does not include the local legal consultant services, for IDR 6,300,000,000,000.00 (six billion three hundred billion rupiahs) including DTP PPh for the deficiency of 2012-2013 by IDR 637,000,000,000.00 (six hundred and thirty-seven billion rupiahs) in which its implementation is regulated by the Ministry of Finance.

(4) Value Add Tax of Goods and Services and Sales Tax on Luxury Goods Revenue as referred to in paragraph (2) letter b, is planned for IDR 524,972,170,000,000.00 (five hundred twenty-four billion nine hundred and seventy-two billion one hundred seventy million rupiahs).

(5) Land and Building Tax Revenue as referred to in paragraph (2) letter c, is planned for IDR 26,684,096,175,000.00 (twenty-six trillion six hundred and eighty-four billion ninety six million one hundred seventy-five thousand rupiahs).

(6) Excise Revenue as referred to in paragraph (2) letter d, is planned for IDR 126,746,318,000,000.00 (one hundred and

twenty-six billion seven hundred and forty-six billion three hundred and eighteen million rupiahs).

(7) Other Tax Revenue as referred to in paragraph (2) letter e is planned for IDR 5,689,120,000,000.00 (five billion six hundred and eighty-nine billion, one hundred and twenty million rupiahs).

(8) International Trade Tax Revenue as referred to in paragraph (1) letter b is planned for IDR 51,503,800,000,000.00 (fifty-one billion five hundred and three billion eight hundred million rupiahs), which consists of: a. import duties revenue; and b. export duties revenue.

(9) Import duties revenue as referred to in paragraph (8) letter a, is planned for IDR 37,203,870,000,000.00 (thirty-seven billion two hundred and three billion, eight hundred and seventy million rupiahs) which includes facility of Government-borne import duties (BM DTP) of IDR 600,000,000,000.00 (six hundred billion rupiahs).

(10) Import duties as referred to in paragraph (8) letter b is planned for IDR 14,299,930,000,000.00 (fourteen trillion two hundred ninety-nine billion, nine hundred and thirty million rupiahs).

(11) Details of Tax Revenues for Fiscal Year 2015 as referred to in paragraph (2) and paragraph (8) shall be further specified by Presidential Decree not later than November 30, 2014.

Article 5

(1) Non-tax Revenue (PNPB) as referred to in Article 3 paragraph b, is planned for IDR 410,340,976,934,000.00 (four hundred and ten billion three hundred and forty billion, nine hundred and seventy-six million nine hundred and thirty-four thousand rupiahs), which consists of: a. natural resources income; b. revenue of SOEs profit sharing; c. Other PNPB; and d. BLU revenue.

(2) Natural resources income as referred to in paragraph (1) letter a, is planned for IDR 254,270,471,590,000.00 (two hundred and fifty-four billion two hundred and seventy billion, four hundred and seventy-one million five hundred

and ninety thousand rupiahs) which consists of: a. revenue from natural resources of petroleum

and natural gas (SDA oil and gas); and b. natural resource revenues of non-oil and gas

(SDA non-oil). (3) Revenue of SOEs profit sharing as referred to in

paragraph (1) letter b, is planned for IDR 44,000,000,000,000.00 (forty-four trillion rupiahs).

(4) In order to optimize the Government Receipt on SOE profits sharing in the banking business, settlement of receivable problems in state-owned enterprises in the field of banking business is carried out: a. in accordance with the provisions of the

legislation in the field of Limited Liability Company (PT), SOE, and Banking;

b. taking into account the principles of good corporate governance; and

c. Government to supervise the settlement of receivable problems of SOE in the banking business.

(5) Other PNPB as referred to in paragraph (1) letter c is planned for IDR 89,823,662,775,000.00 (eighty-nine trillion, eight hundred and twenty-three billion, six hundred and sixty-two million seven hundred seventy-five thousand rupiahs).

(6) BLU revenue as referred to in paragraph (1) letter d is planned for IDR 22,246,842,569,000.00 (twenty-two billion two hundred and forty-six billion, eight hundred and forty-two million five hundred and sixty-nine thousand rupiahs).

(7) Details of PNPB for Fiscal Year 2015 as referred to in paragraph (2), paragraph (3), paragraph (5), and paragraph (6) shall be further specified by Presidential Decree not later than November 30, 2014.

Article 6

Grant Revenue as referred to in Article 3 letter c is planned for IDR 3,256,313,518,000.00 (three billion two hundred and fifty-six billion three hundred and thirteen million five hundred and eighteen thousand rupiahs).

Article 7 State Expenditure Budget for Fiscal Year 2015 is planned for IDR 2,039,483,607,639,000.00 (two quadrillion thirty-nine trillion, four hundred and

eighty-three billion, six hundred and seven million six hundred and thirty-nine thousand rupiahs), which consists of: a. Central Government Expenditure Budget; and b. Transfer to Regions and Village Fund Budget.

Article 8 (1) Central Government Budget as referred to in

Article 7 letter a, is planned for IDR 1,392,442,339,317,000.00 (one quadrillion three hundred and ninety-two billion four hundred and forty-two billion, three hundred and thirty-nine million three hundred and seventeen thousand rupiahs).

(2) Central Government Budget as referred to in paragraph (1) include the state grant management program for IDR 3,565,119,580,000.00 (three billion five hundred and sixty-five billion, one hundred and nineteen million five hundred and eighty thousand rupiahs) that is on-granted to the Regions.

(3) Central Government Budget as referred to in paragraph (1) is grouped into: a. Central Government Expenditure According

to the Organization; b. Central Government Expenditure According

to Function; and c. Central Government Expenditure According

to Program. (4) Budget of Central Government Expenditure as

referred to in paragraph (1), including rewards and sanctions for budget execution of State Ministry/Agency in 2013 based audit results of Supreme Audit Agency (BPK).

(5) Details of Central Government Expenditure According to Organization, Functions, and Program as referred to in paragraph (3) shall be further specified by Presidential Decree not later than November 30, 2014.

Article 9

(1) Budget of Transfer to Regions and Village Fund as referred to in Article 7 letter b is planned for IDR 647,041,268,322,000.00 (six hundred and forty-seven trillion forty-one billion two hundred and sixty eight million three hundred and twenty-two thousand rupiahs ), which consists of:

a. Transfer to the Regions; and b. Village Fund.

(2) Transfer to Regions as referred to in paragraph (1) letter a, is planned for IDR 637,975,068,322,000.00 (six hundred and thirty-seven billion nine hundred and seventy-five billion sixty eight million three hundred and twenty-two thousand rupiahs), which consists of: a. Fiscal Balance Transfer; b. Special Autonomy Fund; c. Privileges Fund for Special Region of

Yogyakarta; and d. Other Transfer Fund.

(3) Village Fund as referred to in paragraph (1) letter b, is planned for IDR 9,066,200,000,000.00 (nine trillion sixty-six billion two hundred million rupiahs).

Article 10

(1) Fiscal Balance Transfer as referred to in Article 9 paragraph (2) letter a, is planned for IDR 516,401,044,380,000.00 (five hundred and sixteen billion one billion four hundred and forty-four million three hundred and eighty thousand rupiahs), which consists of:

a. DBH; b. DAU; and c. DAK. (2) DBH as referred to in paragraph (1) letter a, is

planned for IDR 127,692,520,852,000.00 (one hundred and twenty-seven billion six hundred and ninety-two billion, five hundred and twenty million eight hundred and fifty-two thousand rupiahs).

(3) DAU as referred to in paragraph (1) letter b is allocated 27.7% (twenty-seven point seven percent) of the Domestic Revenue (PDN) net or is planned for IDR 352,887,848,528,000.00 (three hundred and fifty two billion eight hundred and eighty-seven billion, eight hundred and forty-eight million five hundred and twenty-eight thousand rupiahs).

(4) PDN net as referred to in paragraph (3) shall be calculated based on the sum of Tax Revenue and Non-tax Revenues, reduced by the State Revenue-sharing to the Regions.

(5) In the event of changes in APBN which led to PDN net increases or decreases, the amount of DAU is unchanged.

(6) DAK as referred to in paragraph (1) letter c, is

planned for IDR 35,820,675,000,000.00 (thirty-five trillion, eight hundred and twenty billion six hundred and seventy-five million rupiahs), which consists of: a. DAK by IDR 33,000,000,000,000.00 (thirty-

three trillion rupiahs); and b. Additional DAK by IDR 2,820,675,000,000.00

(two billion eight hundred and twenty billion six hundred and seventy-five million rupiahs).

(7) Additional DAK by IDR 2,820,675,000,000.00 (two billion eight hundred and twenty billion six hundred and seventy-five million rupiahs) as referred to in paragraph (6) letter b is allocated as an affirmative policy to the disadvantaged district/city areas and border which has a relatively low financial capacity and are used to fund the following activities: a. transportation infrastructure for IDR

1,812,171,000,000.00 (one billion eight hundred and twelve billion, one hundred and seventy-one million rupiahs);

b. irrigation infrastructure for IDR 496,405,000,000.00 (four hundred and ninety six billion four hundred fifty million rupiahs); and

c. sanitation and drinking water infrastructure for IDR 512,099,000,000.00 (five hundred and twelve billion ninety nine million rupiahs).

(8) Compensatory balance for additional DAK as referred to in paragraph (7) shall be determined based on the fiscal capacity in disadvantaged areas and border areas, with the following provisions: a. very low fiscal capacity, it is mandatory to

provide compensatory balance of at least 0% (zero percent);

b. lower fiscal capacity, it is mandatory to provide compensatory balance of at least 1% (one percent); and

c. intermediate fiscal capacity, it is mandatory to provide compensatory balance of at least 2% (two percent).

Article 11

(1) Special Autonomy Fund as referred to in Article 9 paragraph (2) letter b, is planned for IDR 16,615,513,942,000.00 (sixteen trillion six

hundred and fifteen billion, five hundred and thirteen million nine hundred and forty two thousand rupiahs), which consists of:

a. Special Autonomy Fund Allocation for Papua and West Papua Province for IDR 7,057,756,971,000.00 (seven trillion fifty-seven billion, seven hundred and fifty-six million nine hundred and seventy-one thousand rupiahs) is agreed to be shared each with a proportion of 70% (seventy percent) for Papua Province and 30% (thirty percent) for West Papua Province with the details as follows: 1. Special Autonomy Fund of Papua

Province for IDR 4,940,429,880,000.00 (four trillion nine hundred and forty billion, four hundred and twenty-nine million eight hundred and eighty thousand rupiahs).

2. Special Autonomy Fund of West Papua Province for IDR 2,117,327,091,000.00 (two billion one hundred and seventeen billion three hundred and twenty-seven million ninety one thousand rupiahs).

b. Special Autonomy Fund Allocation for Aceh Province of IDR 7,057,756,971,000.00 (seven trillion fifty-seven billion, seven hundred and fifty-six million nine hundred and seventy-one thousand rupiahs); and

c. Additional fund of infrastructure in the context of special autonomy in Papua and West Papua Province of IDR 2,500,000,000,000.00 (two billion five hundred billion rupiahs) with the following details: 1. Additional fund of infrastructure for Papua

Province of IDR 2,000,000,000,000.00 (two trillion rupiahs); and

2. Additional fund of infrastructure for West Papua Province of IDR 500,000,000,000.00 (five hundred billion rupiahs).

(2) Privileges Fund for Special Region of Yogyakarta as referred to in Article 9 paragraph (2) letter c of IDR 547,450,000,000.00 (five hundred and forty-seven billion, four hundred and fifty million rupiahs).

(3) Other Transfer Fund as referred to in Article 9 paragraph (2) d is planned for IDR 104,411,060,000,000.00 (one hundred and four

billion four hundred eleven billion sixty million rupiahs), with the following details: a. Teacher Professional Allowances for Regional

PNS by IDR 70,252,670,000,000.00 (seventy billion two hundred fifty-two billion six hundred and seventy million rupiahs);

b. Teacher Income Supplement Fund for Regional PNS by IDR 1,096,000,000,000.00 (one trillion ninety six billion rupiahs);

c. School Operational Assistance (BOS) of IDR 31,298,300,000,000.00 (thirty-one billion two hundred and ninety-eight billion three hundred million rupiahs);

d. Regional Incentive Fund (DID) of IDR 1,664,510,000,000.00 (one billion six hundred and sixty-four billion, five hundred and ten million rupiahs); and

e. Local Government Project and Decentralization Fund (P2D2) of IDR 99,580,000,000.00 (ninety-nine billion, five hundred and eighty million rupiahs).

Article 12

Details of Budget for Transfer to Regions and Village Fund as referred to in Article 9, Article 10, and Article 11 shall be further regulated by Presidential Decree which is set not later than November 30, 2014.

Article 13 (1) Subsidy Management Program in Fiscal Year 2015

is planned for IDR 414,680,552,641,000.00 (four hundred and fourteen billion six hundred and eighty billion, five hundred and fifty-two million six hundred and forty-one thousand rupiahs).

(2) The budget for Subsidy Management Program as described in paragraph (1) is used appropriately targeted.

(3) The budget for subsidy as referred to in paragraph (1) may be adapted to the needs for current year outcomes based on changes in the parameters and/or crude oil price (ICP) and rupiah exchange rate.

(4) In case of change in the parameters as referred to in paragraph (3) is in the form of changes in volume of Fuel Oil (BBM), the Government to discuss the changes with the associated commission in Parliament for approval.

(5) The allocation as referred to in paragraph (1) is including the deficiency for the previous fiscal year

to be paid in accordance with BPK audit results. (6) Details of Subsidy Management Program in Fiscal

Year 2015 as referred to in paragraph (1) shall be further specified by Presidential Decree not later than November 30, 2014.

Article 14

(1) In order to perform efficiency and effectiveness of budget execution of State Ministry/Agency, the Government implemented a system of rewards and imposition of sanctions for budget execution of State Ministry/Agency in accordance with the Provisions of Legislation.

(2) The implementation results of rewards and sanctions system for budget execution of State Ministry/Agency as referred to in paragraph (1) shall be calculated in Fiscal Year 2015.

Article 15

(1) The changes on Central Government Expenditure Budget will include:

a. changes in the expenditure budget that sources from PNBP;

b. changes in loans and foreign grants (PHLN) and loans and domestic grants (PHDN);

c. shift of Budget Section 999.08 (General Treasurer Other Expenditure Management) to the Budget Division of State Ministry/Agency, or between budget subsections in the Budget Section 999 (BA BUN);

d. changes in the expenditure budget that comes from SBSN PBS; and

e. budget shifts within 1 (one) Budget Division sourced from pure rupiahs to meet the needs of operational costs, determined by the Government.

(2) Further changes in Budget Financing in the form of ceiling changes for foreign Subsidiary Loan Mechanism resulting of continued and accelerated withdrawal of foreign Subsidiary Loan Mechanism, set by the Government.

(3) The changes as referred to in paragraph (1) and (2) are reported by the Government to the House of Representatives in Revised State Budget Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) 2015.

Article 16

(1) The Government may provide grants to the Government/ Foreign institutions and establish the Government/Foreign institutions receiver for humanitarian purposes.

(2) The Government may provide grants to Local Government in the context of post-disaster rehabilitation and reconstruction.

Article 17

(1) Education Budget is planned for IDR 409,131,707,077,000.00 (four hundred and nine billion one hundred and thirty-one billion seven hundred and seven million seventy-seven thousand rupiahs).

(2) Percentage of Education Budget amounted to 20.06% (twenty point zero six percent), which is a comparison of Education Budget allocations as referred to in paragraph (1) over the total State Expenditure budget by IDR 2,039,483,607,639,000.00 (two quadrillion thirty-nine billion four hundred and eighty-three billion, six hundred and seven million six hundred and thirty-nine thousand rupiahs).

(3) Details of Education Budget as referred to in paragraph (1), shall be further regulated by Presidential Decree not later than November 30, 2014.

Article 18

(1) The total budget of State Revenue for Fiscal Year 2015, as referred to in Article 3, is smaller than the total budget of State Expenditure as referred to in Article 7 so that in Fiscal Year 2015 there is a budget deficit of IDR 245,894,690,062,000.00 (two hundred and forty-five billion eight hundred and ninety-four billion six hundred and ninety million sixty two thousand rupiahs) which will be financed from the Budget Financing.

(2) Budget Financing for Fiscal Year 2015 as referred to in paragraph (1) is obtained from sources: a. Domestic Financing for IDR

269,709,700,514,000.00 (two hundred and sixty-nine trillion, seven hundred and nine billion seven hundred million five hundred fourteen thousand rupiahs); and

b. Foreign Financing Net for IDR 23,815,010,452,000.00 (twenty-three billion

eight hundred and fifteen billion ten million four hundred and fifty-two thousand rupiahs).

(3) Foreign Financing Net as referred to in paragraph (2) letter b includes foreign debt financing, but it does not include the issuance of SBN in international market.

(4) Details of Budget Financing for Fiscal Year 2015 as referred to in paragraph (2), are listed in Appendix of this Law and shall be further regulated by Presidential Decree which is set not later than November 30, 2014.

Article 19

(1) In the case of an estimated budget is deficit exceeded the target set in the State Budget, the Government can use SAL funds, withdrawal of standby loans and/or issuance of SBN as an additional financing.

(2) Obligations arising from the use of SAL funds, withdrawal of standby loans and/or issuance of SBN as an additional financing as referred to in paragraph (1) shall be charged to the state budget.

(3) The use of SAL funds, withdrawal of standby loans and/or issuance of SBN as additional financing as referred to in paragraph (1) is reported by the Government in the Central Government Financial Statements (LKPP) Year 2015.

(4) The provisions concerning the estimated deficit that is exceeded the target as well as the use of SAL funds, withdrawal standby loan, and/or the issuance of SBN as additional financing as referred to in paragraph (1) shall be further regulated by the Minister of Finance Regulation.

Article 20

(1) The Government may use the State Ministry/Agency program sourced from Pure Rupiah in Central Government Expenditure budget allocation to be used as the basis for the issuance of SBSN.

(2) Details of State Ministry/Agency program which can be used as the basis for issuance of SBSN is determined by the Minister of Finance after the ratification of the State Budget Law for Fiscal Year 2015 and the establishment of Presidential Decree on State Budget details for Fiscal Year 2015.

(3) Further provisions on the use of State Ministry/Agency program for issuing SBSN as referred to in paragraph (1) shall be governed by

the Minister of Finance Regulation.

Article 21 (4) In the event of a crisis in SBN domestic market,

the Government with the approval of the House of Representatives is given the authority to use SAL to stabilize the SBN domestic market after taking into account the budget needs until the end of the current fiscal year and the beginning of the next fiscal year.

(5) Approval of DPR as referred to in paragraph (1) is contained in the decision stated in the conclusion of Budget Committee Work Meeting of DPR and the Government, which is given in not more than 1x24 (one time by twenty four) hours after the proposal was presented by the Government to DPR.

(6) The amount of SAL used in order to stabilize the SBN market as referred to in paragraph (1) is reported by the Government in Revised State Budget on Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) 2015.

(7) Further provisions on the use of SAL in order to stabilize the SBN domestic market as referred to in paragraph (1) shall be governed by the Minister of Finance Regulation.

Article 22

(1) In the case of state revenues outcomes are not sufficient to meet the needs of government expenditure in certain time therefore the deficiency can be met from SAL funds, the issuance of SBN, or adjustment of Government Expenditure.

(2) The Government may issue SBN to finance the cash management needs for the implementation of APBN if cash for cash management is not available to meet the needs of government expenditure in the early years.

(3) The Government may repurchase SBN for the benefit of market stabilization and cash management with regard to the amount of net SBN issuance needs to meet the specified financing needs.

(4) The Government may accelerate principal repayments of debt in order to manage the debt portfolio through the issuance of SBN.

(5) In event of debt financing instruments are more favorable, and/or the unavailability of one of the debt financing instruments, the Government may

make changes to the composition of debt financing instruments in order to maintain economic and fiscal resilience.

(6) Changes in the composition of debt financing instruments as referred to in paragraph (5) or the need for a budget reallocation of debt interest, the Government may make reallocation of foreign debt interest payments to domestic debt interest payments or otherwise without causing a change in the total payment of debt interest.

(7) In order to lower the issuance cost of SBN and ensure the availability of financing through debt, the Government may accept collateral debt issuance from institutions that can perform the underwriting function, and/or receiving facilities in the form of financial support.

(8) The provisions as referred to in paragraph (1) through (6) is set by the Government and reported in the Revised State Budget on Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) Year 2015.

Article 23

(1) PMN in the organization/international financial institutions and other PMN to be performed and/or have been recorded in the Government Financial Statements (LKPP) as PMN Permanent Investments, PMN is set to be used in the organization/international financial institutions and such other PMN.

(2) The Government may make payment of PMN exceed the specified ceiling in the Fiscal Year 2015 as a result of foreign exchange difference, which subsequently reported in the Revised State Budget on Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) Year 2015.

(3) Implementation of PMN in the organization/international financial institutions and other PMN as referred to in paragraph (1) shall be determined by Government Regulation.

Article 24

(1) State Owned Asset (BMN) derived Activity Entry List (DIK)/ Project Entry List (DIP) / Budget Implementation List (DIPA) of State Ministry/Agency used and/or operated by the state-owned enterprises and has been listed on the SOE's financial position report as BPYBDS or

similar account, set to be used as PMN in the SOE.

(2) BMN resulting from capital expenditure on DIPA of State Ministry / Agency which will be used by the SOE since intended BMN procurement was set into PMN of the SOE using the BMN.

(3) Implementation of PMN in SOEs as referred to in paragraph (1) and paragraph (2) shall be determined by Government Regulation.

Article 25

(1) The Minister of Finance is authorized to manage the budget of the Government Guarantee Liability to: a. accelerate the development of power plants

using coal; b. provision of guarantees and interest subsidy by

the Central to accelerate the supply of drinking water; and

c. infrastructure guarantee in Government cooperation with enterprises is conducted through underwriting business entity for infrastructure, which is a part of Domestic Financing as it has been allocated in Article 18 paragraph (2) letter a.

(2) In terms of budget of Government Guarantee Liability as referred to in paragraph (1) has been disbursed, it will be counted as a receivable/billing to guaranteed entity or state Ministry/Agency Expenditure.

(3) In the event that there is budget of Government Guarantee Liability that has been allocated as referred to in paragraph (1) is not used up in the current year, the relevant budget of Government Guarantee Liability can be accumulated by the transfer mechanism to the reserve fund account of the Government guarantee which is opened in Bank Indonesia for payment of the Government Guarantee Liability in upcoming fiscal year.

(4) Further provisions on the budget implementation of Government Guarantee Liability as referred to in paragraph (3) shall be governed by the Minister of Finance Regulation.

Article 26

(1) The Government may make payment of debt interest and repayment of principal installment exceeds the ceiling limit set out in Fiscal Year 2015, which subsequently reported by the

Government in Revised State Budget for Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) Year 2015.

(2) The Government may undertake Hedging Transaction in order to control the risk of payment of debt interest and repayment of principal installment.

(3) The fulfillment of liabilities arising from Hedging Transactions as referred to in paragraph (2) is charged to the budget of debt interest payments and/or the issuance of principal installment.

(4) The liabilities arise as referred to in paragraph (3) is not a loss for public finance.

(5) Further provisions on the implementation of Hedging transaction as referred to in paragraph (2) shall be governed by the Minister of Finance Regulation.

Article 27

(1) The Minister of Finance is authorized to settle receivable of government agencies/managed by the Committee for State Receivables Affairs/Directorate General of State Asset Management, especially receivables to micro, small, and medium enterprises (MSMEs), and receivables in the form of Simple Home Loan/Very Simple Home (KPR RS/RSS), including and not limited to restructuring and provision of principle relief up to 100% (one hundred percent).

(2) Further provisions on the procedure for settlement of Government agencies receivable as referred to in paragraph (1) shall be governed by the Minister of Finance Regulation.

Article 28

(1) In the middle of Fiscal Year 2015, the Government prepared outcomes report on State Budget Implementation in the First Semester for Fiscal Year 2015 concerning: a. State Revenue outcomes; b. Government Expenditure outcomes; and c. Budget financing outcomes

(2) In the report as referred to in paragraph (1) Government to include the prognosis for the following 6 (six) months.

(3) The report as referred to in paragraph (1) and paragraph (2) shall be submitted to the House of Representatives not later than the end of July 2015, to be discussed jointly by DPR and the

Government.

Article 29 (1) Adjustment of APBN for Fiscal Year 2015 with

the development and/or changes in circumstances jointly discussed by the House of Representatives and the Government in the preparation of estimates of changes in the State Budget for Fiscal Year 2015, in the event: a. the development of macro-economic indicators

are not in accordance with the assumptions used in APBN for Fiscal Year 2015;

b. change in the main points of fiscal policy; c. circumstances which caused a shift in the

budget of inter-unit organization and/or between programs; and/ or

d. the circumstances which led to the previous year SAL should be used to finance the current year budget.

(2) SAL as referred to in paragraph (1) letter d is SAL in Bank Indonesia account whose its use is determined by the Minister of Finance in accordance with applicable regulations and reported in the accountability of state budget implementation.

(3) The Government filed a Bill on Amendments to State Budget Law for Fiscal Year 2015 based on the changes as referred to in paragraph (1) to obtain the approval of the House of Representatives before FY 2015 ends.

Article 30

(1) In an emergency, in case of the following: a. projections of economic growth under the

assumption and deviation of other basic macroeconomic assumptions that led to the decline in state revenues, and/or increased government expenditure significantly;

b. condition of the financial system failed to perform its functions and role effectively in the national economy; and/or

c. increase in the debt cost, particularly in SBN yields significantly,

The Government and approved by the House of Representatives can perform these following steps: 1. conduct expenditure which are not available

in its budget and/or expenditure that is excess of the ceiling set out in State Budget

for Fiscal Year 2015; 2. shifting inter-program expenditure budget in

one part of the budget and/or between parts budget;

3. reduction in State Budget ceilings in order to increase efficiency while maintaining a fixed target priority programs that should be achieved;

4. the use of SAL to close the state budget financing gap, by first taking into account the availability of SAL for the budget needs until the end of current fiscal year and the beginning of next fiscal year;

5. the additional debt from a standby loan from bilateral and multilateral creditors and/or the issuance of SBN; and

6. lending to the Deposit Insurance Agency (LPS), in the case of LPS experiencing liquidity problems.

(2) In an emergency, the government can withdraw standby loans from bilateral and multilateral creditors as an alternative source of financing in terms of market conditions do not support the issuance SBN.

(3) Costs arising from the provision of a standby loan as referred to in paragraph (1) item 5 and paragraph (2) is part of the debt interest payments.

(4) Measures to overcome the financial conditions as referred to in paragraph (1) letter b is implemented based on the coordination results between the Ministry of Finance and Governor of Bank Indonesia (BI), Chairman of the Board of Commissioners of Financial Services Authority (OJK) and the Chairman of the Board of Commissioners of LPS in Financial System Stability Coordination Forum, as referred to in the legislation regarding the FSA.

(5) Approval of DPR as referred to in paragraph (1) is the decision contained in conclusion of Budget Committee Work Meeting of DPR RI and the Government, which is given in not more than 1x24 (one time twenty four) hours after the proposal was presented by the Government to DPR.

(6) If the approval of DPR as referred to in paragraph (1) for some reasons cannot be determined, then the Government can take measures as referred to in paragraph (1).

(7) The Government expressed the measures of policy implementation as referred to in paragraph (1) and (2) in the Revised State Budget for Fiscal Year 2015 and/or the Central Government Financial Statements (LKPP) Year 2015.

Article 31

(1) After the Fiscal Year 2015 ended, the Government prepares accountability for the implementation of State Budget for Fiscal Year 2015 in the form of Government Financial Statements (LKPP).

(2) The Central Government Financial Statements (LKPP) as referred to in paragraph (1) shall be prepared by the Government Accounting System (SAP).

(3) The Government filed a Bill on Accountability of the State Budget Implementation for Fiscal Year 2015, after the Government Financial Statements (LKPP) as referred to in paragraph (1) was inspected by the Supreme Audit Board, not later than 6 (six) months after the Fiscal Year 2015 ended to obtain approval of the House of Representatives.

Article 32

Government in implementing of State Budget on Fiscal Year 2015 to make effort in meeting the quality targets of economic growth, which is reflected in: a. poverty reduction amounted to 9% (nine percent) to

10% (ten percent); b. economic growth every 1% (one percent) can

absorb around 250,000 (two hundred and fifty thousand) labor;

c. open unemployment rate from 5.5% (five point five per cent) up to 5.7% (five point seven percent); and

d. Gini Ratio reduction, improvement of Farmer Exchange Rate and Fishermen Exchange Rate, taking into account factors, both external and internal.

Article 33

This Law shall come into force on 1 January 2015. For public cognizance, this Ministerial Regulation shall be promulgated and published in the State Gazette of the Republic of Indonesia.

Enacted in Jakarta on October 14, 2014 PRESIDENT THE REPUBLIC OF INDONESIA, Signed DR. H. SUSILO BAMBANG YUDHOYONO

Promulgated in Jakarta on October 14, 2014 MINISTER OF JUSTICE AND HUMAN RIGHTS THE REPUBLIC OF INDONESIA, Signed AMIR SYAMSUDIN STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2014 NUMBER 259 This is a true copy of the original document Ministry of the State Secretariat Deputy Assistant of Economic Legislation Signed Silvanna Djaman

PRESIDENT THE REPUBLIC OF INDONESIA

ELUCIDATION OF

LAW OF THE REPUBLIC OF INDONESIA

NUMBER 27 OF 2014

ON

STATE BUDGET FOR FISCAL YEAR 2015 I. GENERAL

State Budget (APBN) for Fiscal Year 2015 is prepared by referring to the Government Work Plan (RKP) Year 2015, and Macroeconomic Framework as well as the Principles of Fiscal Policy in 2015 as has been discussed and agreed upon, both in the Introduction and First Level Discussion for Discussion of Indonesian Proposed Budget for Fiscal Year 2015 between the Government and House of Representatives of the Republic of Indonesia. This is in accordance with the provisions of Article 12 and Article 13 of Law No. 17 2003 on Public Finance. In addition, the State Budget 2015 also consider the economic, social, political growth in recent months, as well as various policy measures expected to be completed in 2015. Having regard to the development of external factors and macroeconomic stability, the economic growth in Indonesia in 2015 is estimated at about 5.8% (five point eight percent). Along with the improvement in global economic conditions, the government is optimistic that the economic growth target can be achieved, through private consumption growth that is expected to remain high, the more conducive investment climate, and improvement in export performance. Meanwhile, Indonesia's imports will be more focused on capital goods that can trigger the development of domestic industry. Moreover, macroeconomic conditions are also expected to improve and stabilize. Through coordination in fiscal policy, monetary, and real sectors, the exchange rate is expected to be in the range of IDR 11,900.00 (eleven thousand nine hundred rupiahs) per one US dollar. The stability of the exchange rate plays an important role towards achieving the inflation target in 2015 and growth in bank interest rates. In 2015, by ensure the stability of the exchange rate and the smooth flow of supply and distribution of essential commodities, inflation rate is expected to be controlled at the level of 4.4% (four point four percent). Correspondingly, the average rate interest Treasury Bills (SPN) for 3 (three) months is expected to reach 6.0% (six point zero percent). On the other hand, taking into account the growth in world oil demand that is starting to increase in line with the recovery of the world economy, the

average Indonesian Crude Price/ICP in the international market in 2015 is estimated to be in the range of US$ 105.0 (one hundred five dollars US) per barrel. Meanwhile, crude oil lifting rate is estimated at about 900 (nine hundred) thousand barrels per day, while the lifting gas is estimated at 1,248 (one thousand two hundred and forty eight) thousand barrels equivalent of oil per day. Indonesia's development strategy is based on the implementation of the National Long Term Development Plan (RPJPN) 2005-2025. The implementation of RPJPN strategy is divided into four stages of the National Medium Term Development Plan (RPJMN) that each stage contains a plan and strategy development for five years to be implemented by the Government. Furthermore, the elected President and members of the cabinet who help him will put the vision, mission, and government work plan to address the challenges and actual problems, as well as to achieve the goals of medium-term and long-term development plans which have been prepared. The first and second stages of RPJMN have been completed by the end of service years of the United Indonesia Cabinet I and II, so that 2015 is the first year in RPJMN agenda phase 3. Based on the implementation, achievement, and as the continuation of the 1st RPJMN (2005-2009) and 2nd RPJMN (2010-2014), 3rd RPJMN (2015-2019) which aims to consolidate the overall development by emphasizing efforts in escalation of competitiveness based on natural resources and human resources quality, including the development of science and technology as well as innovation. Efforts to achieve these objectives will be implemented through the achievement of development goals in each year with a different focus, in accordance with the challenges and conditions. The focus of these activities is manifested in the Government Work Plan (RKP) in each year. RKP 2015 is prepared and based on the theme "Continuing Development Reform for the Fair Economic Development Acceleration" and as elaboration, it is identified 25 strategic issues to be grouped according to the nine areas of development outlined in RPJPN 2005-2025, as follows: First, the field of social, cultural and religious life, with strategic issues include (1) the population control; (2) reform of the health-related development of the National Social Security System (demand and supply) and a decrease in maternal and infant mortality; (3) reform of educational development; and (4) the synergy of acceleration and poverty reduction. Second, the economic field, with strategic issues include (1) the transformation of industrial sector in a broad sense; (2) improving the competitiveness of labor; (3) improving the competitiveness of SMEs and cooperatives; (4) improving the efficiency of logistics and distribution system; and (5) public finance reform. Third, is the field of science and technology with the strategic issues of to improve the science and technology capacity building. Fourth, the field of infrastructure, with strategic issues include (1) improving in water resistance; (2)

strengthening connectivity through the balanced development among regions, economic growth stimulus, and development of urban mass transit; and (3) an improving in the availability of basic services infrastructure, through an increase in the national electrification ratio, improve access to drinking water and sanitation, and housing arrangement/settlement. Fifth, the political field with the strategic issue is of democratic consolidation. Sixth, the field of defense and security with strategic issues include (1) the acceleration of Minimum Essential Force (MEF) development and Almatsus National Police with the defense industry empowerment and (2) increasing of order and security in the country. Seventh, the field of legal and personnel with strategic issues include (1) reform of the bureaucracy and increase the capacity of public institutions and (2) the prevention and eradication of corruption. Eighth, the field of spatial and regional with strategic issues include (1) the development of disadvantaged areas and borders; (2) disaster risk management; and (3) rural development synergy. Ninth, the field of natural resources and environment with strategic issues include: (1) strengthening food security; (2) improving energy security; (3) the acceleration of the marine development; and (4) Improving the economic aspect of biodiversity and environmental quality. In order to be able to achieve national development goals and other national priorities, one of the things that needed to be done by the Government is to optimize the taxation revenue and Non Tax Revenues, especially natural resources. Increased in tax revenue is performed through the tax expansion and intensification. Meanwhile, PNBP is carried out through coordination steps among Government agencies, including law enforcement in order to crack down on illegal mining activities in the field of mineral and coal mining, as well as to crack down ports which do not have official permission. In addition, in order to overcome the obstacles that arise in the absorption subsidiary loan mechanism, such as licensing and land acquisition issues, in addition to improve coordination among government agencies, the Government also coordinate with Local Government. Furthermore, the achievement of development goals priority is also achieved through efficiency measures of financing sources with emphasis on domestic financing, the debt utilization for productive activities, as well as the utilization of foreign loans selectively which is preferred for the development of infrastructure and energy. In order to support domestic energy needs derived from dwindling oil and gas, it needed to increase geothermal sources through: i) intensification and extensive exploration; ii) the Legislation improvement in the field of geothermal that provide benefits and justice to the region and to keep the investment climate in the field of geothermal energy; and iii) the issuance of PPh DTP policy for DTP geothermal entrepreneur whose permits was issued prior to Law No. 27 Year 2003 on Geothermal applies.

Discussion of this Law was carried out by the Government and DPR with regard to Constitutional Court Decree No. 35/ PUU-XI/2013 dated May 22, 2014.

II. ARTICLE BY ARTICLE Article 1

Quite clear

Article 2 Quite clear


Article 4 Paragraph (1) Quite clear Paragraph (2) Quite clear

Paragraph (3) Letter a

Quite clear Letter b

What is meant by "third party Government-borne income tax" is a third party that provides services to the Government in order to issue and/ or repurchase/redemption of SBN in international market, which among other realtor services and consultants of international law services and purchasing/exchangers services.

Paragraph (4)

Quite clear Paragraph (5)

Quite clear Paragraph (6) Quite clear Paragraph (7)





Quite clear

Article 5 Paragraph (1)

Quite clear


Quite clear Letter b

Revenue of non-oil natural resources sourced from the forestry sector is not only intended as the revenue goals but it rather aimed at securing sustainability.

Paragraph (3) Quite clear

Paragraph (4) While waiting for the amendment of Law No. 49 Prp. 1960 on State Receivables Affairs Committee, and in order to accelerate the completion of problematic receivables in SOEs in the banking business, its receivables management can be done through the management mechanism under the provisions of the legislation in the field of a limited liability company and in banking. While related to the authority granting to GMS and Government supervision in settlement of receivables problems in SOE in the banking business is based on the provisions of legislation in the field of SOEs.




Article 6

Quite clear Article 7



Paragraph (1) Transfer to Regions on Fiscal Year 2015 for the New Autonomous Region (DOB) established in 2014 is set as follows: 1. DBH

a. DBH Tax 1) Allocation of DBH PPh Individual, and DBH PPh non-oil and

gas derived from main region is shared with DOB in according with revenue planned.

2) Allocation of DBH PPh oil and gas obtained from main region to DOB is split by the number of population and area.

3) Allocation of DBH Tax of equalization results obtained from main region is evenly divided to DOB.

4) Allocation of DBH CHT obtained from main region is split to DOB based on the population.

b. DBH SDA 1) Allocation of SDA DBH of main producing region is split to

DOB based on the number of population and area. 2) Allocation of SDA DBH of non-producing main region is

divided evenly to DOB.

2. DAU a. DAU for DOB is allocated after its establishment Law was

passed. b. DAU calculation is performed by split with the main region by

using population data, area, and personnel expenditure. 3. DAK

a. In accordance to mandate of DOB establishment Law, DOB is prioritized to get DAK allocation of Regional Government Infrastructure.

b. Main region affected of expansion is prioritized to get DAK allocation of Regional Government Infrastructure.

c. DAK of another sector is allocated in the second year taking into account the readiness of the region to implement DAK activities.

4. Other Transfer Funds

Teacher professional allowance fund and additional income for PNSD teachers are allocated based on the sharing of teachers data between main region and DOB.



Article 10


Paragraph (2) This DBH is included DBH of Income Tax Article 25 and Article 29 of Individual Resident Taxpayer with final levied by Government Regulation Number 46 Year 2013 regarding Income Tax on Income from Business received or obtained by Taxpayer who has certain Gross Turnovers.


Paragraph (4) PDN net of IDR 1,273,963,352,085,000.00 (one quadrillion two hundred and seventy-three billion nine hundred and sixty-three billion, three hundred and fifty two million eighty-five thousand

rupiahs) is calculated based on the sum of Tax Revenues amounted to IDR 1,379,991,627,125,000.00 (one quadrillion three hundred and seventy-nine billion, nine hundred and ninety-one billion six hundred and twenty-seven million, one hundred twenty-five thousand rupiahs) and non-tax revenues amounted to IDR 410,340,976,934,000.00 (four hundred and ten billion three hundred forty billion, nine hundred and seventy-six million nine hundred and thirty-four thousand rupiahs), reduced by the Government Receipt to be shared to the regions, which consists of: a. Income Tax Article 25 and Article 29 of Individual Resident

Taxpayer and Income Tax Article 21 of IDR 115,707,082,589,000.00 (one hundred and fifteen billion seven hundred seven billion eighty two million five hundred and eighty-nine thousand rupiahs);

b. Land and Building Tax (PBB) revenue of IDR 26,684,096,175,000.00 (twenty-six trillion six hundred and eighty-four billion ninety six million one hundred seventy-five thousand rupiahs);

c. Tobacco Product Excise Revenue of IDR 120,557,190,000,000.00 (one hundred and twenty billion five hundred and fifty-seven billion one hundred ninety million rupiahs);

d. Natural Resources (SDA) Revenue from Oil and Gas for IDR 224,263,060,000,000.00 (two hundred and twenty-four billion two hundred and sixty-three billion sixty million rupiahs);

e. SDA Revenue from General Mining for IDR 24,599,745,000,000.00 (twenty-four billion five hundred and ninety-nine billion, seven hundred and forty-five million rupiahs);

f. SDA Revenue from Forestry for IDR 3,724,400,000,000.00 (three trillion seven hundred and twenty-four billion four hundred million rupiahs);

g. SDA Revenue from Fisheries for IDR 250,000,001,000.00 (two hundred and fifty billion and one thousand rupiahs); and

h. SDA Revenue from Geothermal for IDR 583,678,209,000.00 (five hundred and eighty-three billion six hundred and seventy-eight million two hundred and nine thousand rupiahs).



Paragraph (7) District/city of disadvantaged areas is determined in accordance with the provisions of legislation.



Article 12




Paragraph (2) The basis of calculation used in the implementation of rewards and sanctions on budget execution of State Ministry/Agency in 2013 is the Financial Statements of State Ministry/Agency in 2013 which has been audited by the Supreme Audit Agency (BPK).



What is meant by "ceiling changes on foreign subsidiary loan mechanism" is the increase in ceiling of foreign subsidiary loan mechanism as a result of continued and multi-year foreign subsidiary loan mechanism and/or acceleration of the withdrawal of foreign subsidiary loan that has been approved in order to optimize the utilization of foreign subsidiary loan. Changes in the ceilings of foreign subsidiary loan does not include the new subsidiary loan has not been allocated in the state budget for Fiscal Year 2015.

Paragraph (3) What is meant by "reported its implementation in Revised State

Budget on Fiscal Year 2015" is reporting the details of change/shift of Central Government Expenditure budget conducted before the Revised State Budget on Fiscal Year 2015 to the House of Representatives. While the definition of "reported its implementation in Government Financial Statements (LKPP) 2015" is reporting details of changes/shifts of Central Government Expenditure Budget conducted throughout 2015 after the Revised State Budget on Fiscal Year 2015 to the House of Representatives.

Article 16


Paragraph (1) In addition to Education Budget allocation, the Government manages National Education Development Fund (DPPN), which is part of the education budget allocations in previous years that had been accumulated as education endowment fund which is managed by the Education Fund Management Institution. Management results of education endowment fund is used to ensure the sustainability of education program for the next generation as a form of intergenerational accountability, among others, in the form of scholarships, research, and education reserve fund in order to anticipate the purposes of rehabilitation education facilities damaged by natural disasters.



Article 18


Paragraph (2) Domestic Financing Component among others, are in the form of State Capital Investment (PMN) to Bank Indonesia (BI) as a follow-up to the transfer of quota ownership or Government capital in IMF to BI consisting of promissory notes and hard currency. Recording of quota transfer or the capital component of Domestic Financing is using the net principle which is the net value of hard currency to the Government on IMF by BI bailout for payments of Government capital on the International Financial Institutions and promissory notes.



Article 19

Paragraph (1) What is meant by "deficit" is the deficit as defined in the Law No. 17 of 2003 on Public Finance. What is meant by "standby loan" is loan from multilateral and bilateral agencies, among others, the World Bank (Program For Economic Resilience, Investment and Social Assistance in Indonesia (SHIELD)), the Asian Development Bank (Precautionary Financing Facility and / or Countercyclical Support Facility).




Article 20

Quite clear


What is meant by "domestic SBN market crisis" is the condition of SBN market crisis based on Crisis Management Protocol (CMP) of SBN market established by the Minister of Finance. The use of SAL funds to stabilize SBN market can be done if SBN market conditions have been set at the level of crisis by the Minister of Finance. The crisis in SBN market could trigger a crisis in the financial markets as a whole, given that most financial institutions have SBN. The situation can also trigger a fiscal crisis, if the government should make efforts to rescue national financial institutions. Stabilization of SBN domestic market is performed through the purchase of SBN in secondary market by the Minister of Finance.




Article 22



Paragraph (3) Quite Clear


Paragraph (5) Changes in the composition of debt financing instruments include changes in SBN net, Domestic Loan withdrawal of the Interior, and/or Foreign Loan withdrawal. Foreign Loan withdrawal includes Program Loan and Project Loan withdrawal. In the case of Foreign Loan and/or Domestic Loan is not available it can be replaced with the issuance of SBN or otherwise in order to maintain economic and fiscal resilience.

Paragraph (6)



Quite clear


Article 24

Paragraph (1) What is meant by "State Owned Asset" is in the form of land and/or buildings and in addition to land and/or buildings. Determination BPYBDS as PMN in SOEs will include, among others, BPYBDS as recorded in the financial statements of PT PLN (Persero) which has been handed over by the Ministry of Energy and Mineral Resources (MEMR) to be an additional of PMN for PT PLN (Persero).



Article 25


Paragraph (2) What is meant by "guaranteed entity" is the party that received government guarantees.

Paragraph (3) Formation of reserve fund account of Government guarantee is intended primarily to avoid budget allocation of Government guarantee in large numbers within one fiscal year in the future, to ensure the availability of substantial funds as needed, ensure timely payment of claims, and provide assurance to stakeholders (including Creditor/Investor). Funds that have accumulated in the reserve account of Government guarantee can be used to pay liabilities Guarantee inter guarantee program.


Article 26

Paragraph (1) Expenditures exceed the budget ceiling, among others, can be caused by:

1. Macroeconomic conditions that are not in accordance with the conditions expected at the time of preparation the Revised APBN and/or report of implementation outcomes of APBN in First Semester of Fiscal Year 2015;

2. The impact of debt restructuring in order to manage the debt portfolio;

3. The impact of accelerated drawdown; and 4. The impact of hedging transactions on interest payments and

debt principal repayments. Paragraph (2)

Implementation of hedging transactions is reported by the Government in Government Financial Statements (LKPP) 2015.

Paragraph (3) Implementation of hedging transactions may rise to costs and revenues for the Government. Costs and revenues for the Government of hedging transactions over the payment of debt interest are charged/be part of the budget for debt interest payments. Costs and revenues for the Government of hedging transactions on debt principal repayments are charged / be part of the budget for expenditure of debt principal repayments.

Paragraph (4) What is meant by "non public financial losses" due to Hedging transactions are intended to protect the interest payments and debt principal repayments from the risk of currency fluctuations and interest rate, and the hedging transaction is not intended for speculative gain.


Article 27

Paragraph (1) Quite clear Paragraph (2)

Procedures for the settlement of Government Agency receivable are stipulated in Minister of Finance Regulation, including the procedures and criteria for completion ex-BPPN receivables (Indonesian Bank Restructuring Agency).

Article 28

Quite clear Article 29 Paragraph (1) Letter a Quite Clear Letter b

What is meant by changes in the main points of fiscal policy, including changes in the Government Work Plan (RKP) Year 2015 to conform the vision and mission of the President and Vice President by the National Medium Term Development Plan (RPJMN) Year 2015-2019.

Letter c Quite Clear

Letter d Quite Clear



Article 30


The meaning of projection in this provision is the economic growth projection at least 1% (one percent) under the assumption and/or other macro-economic assumptions projection to experience the lowest deviation of 10% (ten percent) of the assumptions that have been set, but the prognosis lifting with a deviation of at least 5% (five percent).

Letter b What is meant by a financial system that has failed in this provision is shown by the difficulty of liquidity, solvency problems, failure of the guarantee program to meet the deposit payment obligations, and/or a decline in public confidence in the financial system. The meaning of financial system in this paragraph includes financial institution and financial market, including SBN market.

Letter c The increase in the debt cost that comes from the increase in SBN yield is the significant increase in yield which led to a crisis in SBN market, which is determined by the Minister of Finance based on the parameters in Crisis Management Protocol (CMP) of SBN market.

This emergency caused prognosis decrease in state revenues generated from tax and non-tax revenues, and any additional burden estimation of government obligations derived from debt principal and interest payments, subsidies for fuel and electricity, as well as other expenditures.





Paragraph (6) The definition of "for a reason or another it cannot be done" is when the Budget Committee have not been able to do the work meeting and/or decide in work meeting in 1x24 (one time twenty four) hours after the proposal was presented by the Government to the DPR.


Article 31


Determination of poverty level is in accordance with the methodology in calculation of National Poverty Line (GKN) conducted by the Central Bureau Agency (BPS).


GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 5593

APPENDIX LAW OF THE REPUBLIC OF INDONESIA NUMBER 27 OF 2014 ON STATE BUDGET FOR FISCAL YEAR 2015

DETAILS OF BUDGET FINANCING 5,894,690,062,000.00 1. DOMESTIC FINANCING 269,709,700,514,000.00 1. Domestic Banking 4,467,479,293,000.00 1.1 Revenue of Subsidiary loan mechanism

installments repayment 4,467,479,293,000.00

2. Domestic Non-banking 265,242,221,221,000.00 2.1 The results of asset management 350,000,000,000.00 2.2 Government securities (net) 277,049,800,000,000.00 2.3 Domestic Loans (net) 1,621,190,000,000.00 2.3.1 Withdrawal of gross domestic loan 2,000,000,000,000.00 2.3.2 Payment of domestic principal

installments -378,810,000,000.00

2.4 Government investment funds -12,647,146,779,000.00 2.4.1 Revenue of Return of Investment 778,320,274,000.00 2.4.2 State Capital Investment (PMN) -7,319,167,053,000.00 2.4.2.1 PMN to SOEs -5,107,307,000,000.00 2.4.2.1.1 PT Sarana Multi Infrastructure (SMI) -2,000,000,000,000.00 2.4.2.1.2 PT Sarana Multigriya Financial (SMF) -1,000,000,000,000.00 2.4.2.1.3 PT Geo Dipa Energi (GDE) -607,307,000,000.00 2.4.2.1.4 PT PAL Indonesia -1,500,000,000,000.00 2.4.2.2 PMN to organizations/international

financial institutions -433,539,779,000.00

2.4.2.2.1 International Bank for Reconstruction and Development (IBRD)

-169,359,779,000.00

2.4.2.2.2 International Fund for Agricultural Development (IFAD)

-47,600,000,000.00

2.4.2.2.3 International Development Association (IDA)

-216,580,000,000.00

2.4.2.3 Other PMN -1,778,320,274,000.00 2.4.2.3.1 Bank Indonesia (BI) -778,320,274,000.00 2.4.2.3.2 Indonesian Export Financing Agency

(LPEI) -1,000,000,000,000.00

2.4.3 Revolving funds -6,106,300,000,000.00 2.5 Underwriting liability -1,131,622,000,000.00 2. FOREIGN PAYMENT (NET) -

23,815,010,452,000.00 1. Withdrawal of gross foreign loan 47,037,121,419,000.00 1.1 Program Loan 7,140,000,000,000.00 1.2 Project Loan 39,897,121,419,000.00 1.2.1 Central Government Project Loan 35,577,749,548,000.00 1.2.1.1 Ministry / Agency Project Loan 32,881,457,258,000.00 1.2.1.2 On-granted Project Loan 2,696,292,290,000.00 1.2.2 Revenue Subsidiary Loan Mechanism 4,319,371,871,000.00 2. Continuation of loans to SOE/local -4,319,371,871,000.00

government 3. Payment of foreign debt principal repayments -66,532,760,000,000.00 PRESIDENT THE REPUBLIC OF INDONESIA, Signed DR. H. SUSILO BAMBANG YUDHOYONO This is a true copy of the original document Ministry of the State Secretariat Deputy Assistant of Economic Legislation Signed Silvanna Djaman

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