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| State Budget of Indonesia | |
|---|---|
| Name | State Budget of Indonesia |
| Native name | Anggaran Pendapatan dan Belanja Negara |
| Jurisdiction | Republic of Indonesia |
| Date formed | 1945 |
| Currency | Indonesian rupiah |
| Minister | Minister of Finance |
State Budget of Indonesia is the annual financial plan of the Republic of Indonesia that outlines projected revenue and planned expenditure executed by the central authorities under the authority of the President of Indonesia and ratified by the People's Consultative Assembly through the Dewan Perwakilan Rakyat (DPR). It serves as the principal fiscal instrument linking policies of the Ministry of Finance (Indonesia), Bank Indonesia, and sectoral ministries such as the Ministry of National Development Planning (Bappenas) to national programs in areas like infrastructure, health, and social protection.
The budgetary origins trace to the revolutionary period following the Proclamation of Indonesian Independence and the 1945 Constitution of Indonesia, which created early fiscal institutions including the Ministry of Finance (Indonesia). During the Guided Democracy era under Sukarno and the transitional phase to New Order under Suharto the budget shifted from wartime scarcity to centralized development planning aligned with the Five-Year Development Plans (Repelita). The post-1998 Reformasi era introduced decentralization after the 1999 Regional Autonomy Law, altering transfers between the central state and provincial government units and reshaping budget composition following the 1997–1998 Asian Financial Crisis. Subsequent administrations—B. J. Habibie, Megawati Sukarnoputri, Susilo Bambang Yudhoyono, Joko Widodo—each adjusted fiscal priorities, with major reforms like the Fiscal Balance Law and modernizations influenced by interactions with the International Monetary Fund and World Bank.
The legal basis rests on the Constitution of Indonesia (1945) and statutes such as the Law on State Finance (Law No. 17/2003), later amended by laws like Law No. 1/2004 and the Fiscal Policy Law. The annual budget cycle begins with the President sending the State Budget (APBN) proposal to the DPR after coordination with Bappenas and the Ministry of Finance (Indonesia), and concludes with DPR approval and presidential promulgation. The process incorporates medium-term frameworks like the Medium Term National Development Plan (RPJMN), debt ceilings governed by regulations tied to Bank Indonesia guidance, and compliance with standards from international instruments including guidelines followed by the International Monetary Fund and Asian Development Bank for debt sustainability and fiscal transparency.
Primary revenue sources include tax receipts from institutions such as the Directorate General of Taxes (DGT), non-tax revenues from state-owned enterprises like Pertamina and PT PLN (Persero), customs duties administered by the Directorate General of Customs and Excise, and intergovernmental transfers linked to the Revenue Sharing Fund (Dana Bagi Hasil) and the General Allocation Fund (Dana Alokasi Umum). Major tax instruments involve the Value Added Tax (VAT), corporate income tax administered under the Directorate General of Taxes (DGT), and personal income tax regimes affected by tax policy set by the Ministry of Finance (Indonesia). Natural resource revenues—royalties and production sharing—from entities tied to the Ministry of Energy and Mineral Resources and firms such as Freeport Indonesia and PT Pertamina (Persero) have historically contributed significantly.
Expenditure categories are divided among personnel costs for civil servants managed via the State Civil Service Agency (BKN), subsidies (fuel and fertilizer linked to Pertamina and agricultural policy), social assistance programs including those delivered with the Ministry of Social Affairs (Indonesia), capital spending for infrastructure projects under coordination of Bappenas and Ministry of Public Works and Public Housing (PUPR), and debt servicing for sovereign bonds issued in domestic and international markets with involvement by the Debt Management Office (within the Ministry of Finance). Transfers to regional governments implemented under the Law on Regional Government (Undang-Undang Pemerintahan Daerah) constitute a sizable share, while defense allocations flow to the Ministry of Defense (Indonesia) and procurements involving the Indonesian National Armed Forces.
Fiscal policy is formulated by the Ministry of Finance (Indonesia) in coordination with Bank Indonesia and is guided by targets for deficit-to-GDP ratios, debt-to-GDP sustainability assessed with assistance from the World Bank and International Monetary Fund. Countercyclical measures have been deployed in response to shocks such as the 2008 global financial crisis and the COVID-19 pandemic in Indonesia, including stimulus packages and tax relief instruments overseen by the Coordinating Ministry for Economic Affairs (Indonesia). Public debt instruments include rupiah-denominated government bonds and global sukuk marketed through state securities managed by the Directorate General of Budget Financing and Risk Management.
Transparency initiatives involve public reporting by the Ministry of Finance (Indonesia), audit functions performed by the Audit Board of Indonesia (BPK), and legislative scrutiny by DPR’s budgeting committee. Anti-corruption oversight engages the Corruption Eradication Commission (KPK), while civil society organizations such as Indonesia Corruption Watch and international partners like the Open Government Partnership advocate for disclosure reforms. Budget execution is monitored through performance-based budgeting frameworks and the national treasury system operated by the Directorate General of Treasury, with the BPK publishing audit opinions that have driven institutional reforms.
Recent trends include increased allocations for infrastructure under the Joko Widodo administration, expanded social protection spending amid the COVID-19 pandemic in Indonesia, and rising attention to fiscal consolidation and tax reform driven by agencies like the Directorate General of Taxes (DGT) and the Ministry of Finance (Indonesia). Challenges encompass managing commodity-price volatility affecting revenues tied to mining and oil and gas sectors, balancing regional fiscal disparities created by decentralization reforms, addressing contingent liabilities from state-owned enterprises like Pertamina and PT PLN (Persero), and meeting climate finance commitments aligned with international frameworks such as the Paris Agreement.
Category:Government finances of Indonesia