Page 3 - Newsletter (Technical Rules for Super Tax Deduction on Vocational Activities Released)

DDTC Newsletter Vol.02 | No.05 I September 2019 Page 3 of 5

Technical Rules for Super Tax Deduction on Vocational
Activities Released

As for the earmarked revenue, including cigarette still bear the medium and low categories respectively as
tax, revenue sharing fund (Dana Bagi Hasil/DBH), many as 8 provinces for both categories.
tobacco products excise (Cukai Hasil Tembakau/CHT),
Picture 1 - Provincial Distribution Based on Local Fiscal
reforestation funds, physical and non-physical special
Capacity Map
allocation funds (Dana Alokasi Khusus/DAK), special
autonomy funds, additional infrastructure funds, 10
9
Yogyakarta (Daerah Istimewa Yogyakarta/DIY) privilege 9
8 8
funds, and village funds. Certain expenditures include 8
employee expenditure, interest expenditure, grant 7
expenditure for new autonomous regions, revenue 6
5
sharing expenditure, and allocation of village funds. 5
4
4
Based on the provincial IKFD, the provincial regions are 3
grouped into 5 local fiscal capacity categories as follows: 2
1
IKFD Ranges Local Fiscal Capacity Category 0
Very low Low Average High Very high
IKFD < 0,509 Very low Source: MoF Reg No. 126/2019 Appendix.
0,509 ≤ IKFD < 0,720 Low
Furthermore, the four provinces with very high categories
remain concentrated in Java, namely DKI Jakarta, West
0,720 ≤ IKFD < 1,089 Average
Java, Central Java and East Java. Papua which once
1,089 ≤ IKFD < 1,959 High achieved the very high category in 2017 actually fell to the
very low category in 2019. Provinces such as Southeast
IKFD ≥ 1,959 Very high
Sulawesi, Central Sulawesi and Gorontalo were recorded
as having very low fiscal capacity in 2019.

Based on regency/city category, regencies/cities in Picture 2 - Regency/City Distribution Based on Local Fiscal
Indonesia are also grouped into 5 local fiscal capacity Capacity Map
categories as follows:
140
127 126 127
IKFD Ranges Local Fiscal Capacity Category 120
100
86
IKFD < 0,304 Very low
80
0,304 ≤ IKFD < 0,445 Low
60
42
0,445 ≤ IKFD < 0,808 Average
40
0,808 ≤ IKFD < 1,564 High 20
IKFD ≥ 1,564 Very high 0
Very low Low Average High Very high
Source: MoF Reg No. 126/2019 Appendix.
MoF Reg No.126/2019 revokes the previous regulation,
namely Mof Reg No.107/PMK.07/2018 concerning Local Meanwhile, only 42 of 508 regencies/cities in
Fiscal Capacity Map. When compared, the local fiscal Indonesiaare in the very high category. The regencies/
capacity of 34 provinces in Indonesia has not moved from cities include Surabaya City, Medan City, Bekasi City,
the existing position. As of 2017, the number of provinces Semarang City, Tangerang Regency, and Sidoarjo Regency.
with very low local fiscal capacity categories continues Additionally, 86 regencies/cities occupy the high local
to reach 9 provinces until 2019. fiscal capacity category. While the average, low and very
low categories are each occupied by 127, 126, and 127
As for the number of provinces with very high local fiscal regencies / cities.
capacity categories, there are still 4 provinces since 2017
until now. Then, only 5 provinces that bear a high local Each region is grouped through the fiscal capacity
fiscal capacity category, and the remaining 16 provinces categories of this region can be seen in full in the