PRESIDENT OF THE REPUBLIC OF INDONESIA

Transcription

1 COPY LAW OF NUMBER 12 OF 2016 REGARDING AMENDMENT TO LAW NUMBER 14 OF 2015 REGARDING THE STATE BUDGET FOR FISCAL YEAR 2016 BY THE GRACE OF GOD ALMIGHTY THE PRESIDENT OF, Considering : a. whereas the State Budget for Fiscal Year 2016 is prepared in accordance with the need of state administration and the capability of collecting government revenue for the realization of an economic democracy-based national economy with the principles of togetherness, justice, efficiency, continuity, environmental sense, and independence, in order to achieve the safe and peaceful, just and democratic Indonesia, to improve the welfare of the people, as well as to safeguard the balance of progress and the unity of national economy; b. whereas since the enactment of Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016, there have been Macroeconomic Basic Assumptions developed and changes in the principles of fiscal policies which have had significant impact on the State Budget for Fiscal Year 2016; c. whereas

2 - 2 - c. whereas in order to safeguard the implementation of the State Budget for Fiscal Year 2016, it is necessary to adjust the target of government revenue, government expenditure, budget deficit, and the need and source of state budget finance, in order to be more realistic and able to support the achievement of the 2016 and mid-term economic development goals, either for supporting the national economy activities to stimulate growth, creating and expanding the employment, as well as improving the service quality for the community and decreasing the poverty, while keeping on maintaining the national stability in accordance with the national development program; d. whereas based on the consideration as set forth in letters a, b, and c, it is necessary to stipulate a Law regarding the Amendment to Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016; In view of : 1. Article 5 paragraph (1), Article 20, Article 23 paragraphs (1) and (2), Article 31 paragraph (4), and Article 33 paragraphs (1), (2), (3), and (4) of the 1945 Constitution of the Republic of Indonesia; 2. Law Number 17 of 2003 regarding State Finances (Supplement Number 4286 to State Gazette of the Republic of Indonesia Number 47 of 2003); 3. Law Number 17 of 2014 regarding People s Consultative Assembly, House of Representatives, Regional Representative Council, and Regional House of Representatives (Supplement Number 5568 to State Gazette of the Republic of Indonesia Number 182 of 2014) as amended by Law Number 42 of 2014 regarding Amendment to Law Number 17 of 20l4 regarding People s Consultative Assembly, House of Representatives, Regional Representative Council, and Regional House of Representatives (Supplement

3 - 3 - (Supplement Number 5650 to State Gazette of the Republic of Indonesia Number 383 of 2014); 4. Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016 (Supplement Number 5767 to State Gazette of the Republic of Indonesia Number 278 of 2015); With the Joint Approval of THE HOUSE OF REPRESENTATIVES OF and THE PRESIDENT OF BE IT HEREBY RESOLVED: To stipulate : LAW REGARDING AMENDMENT TO THE LAW NUMBER 14 OF 2015 REGARDING STATE BUDGET OF THE FISCAL YEAR Article I Several provisions in Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016 (Supplement Number 5767 to State Gazette of the Republic of Indonesia Number 278 of 2015) shall be amended as follow: 1. Provision of Article 3 shall be amended so as to read as follows: Article 3

4 - 4 - Article 3 The Government Revenue for Fiscal Year 2016 shall be estimated at Rp1,786,225,025,908, (one quadrillion seven hundred eightysix trillion two hundred twenty-five billion twenty-five million nine hundred and eight thousand rupiah), which shall be sourced from the followings: a. Tax Revenue; b. PNBP; and c. Grants Revenue. 2. Provision of Article 4 shall be amended so as to read as follows: Article 4 (1) Tax Revenue as referred to in Article 3 letter a shall be estimated at Rp1,539,166,244,581, (one quadrillion five hundred thirty-nine trillion one hundred sixty-six billion two hundred forty-four million five hundred and eighty-one thousand rupiah), 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 shall be estimated at Rp1,503,294,744,581, (one quadrillion five hundred three trillion two hundred ninety-four billion seven hundred forty-four million five hundred and eightyone thousand rupiah), which consists of: a. income tax revenue; b. value added tax of goods and services and sales tax on luxury goods revenue; c. property tax revenue; d. excise revenue; and e. other tax revenues. (3) Income

5 - 5 - (3) Income Tax revenue as referred to in paragraph (2) letter a shall be estimated at Rp855,842,695,146, (eight hundred fiftyfive trillion eight hundred forty-two billion six hundred ninetyfive million one hundred and forty-six thousand rupiah), which includes Government-borne income tax (PPh DTP) for: a. geothermal commodity amounting to Rp1,848,688,290, (one trillion eight hundred fortyeight billion six hundred eighty-eight million two hundred and ninety thousand rupiah), including the deficit for the previous fiscal year with reference to the audit result by the Audit Board of the Republic of Indonesia (BPK), the implementation of which is governed by the Regulation of the Minister of Finance; b. interest, yields, and third party s income for the service(s) provided to the Government in issuance and/or buyback/exchange of SBN (Government Securities) in international market, excluding local legal consultant services, amounting to Rp7,731,753, (seven trillion seven hundred thirty-one billion seven hundred fifty-three million two hundred and ten thousand rupiah), including the deficit for the previous fiscal year with reference to the audit result by the Audit Board of the Republic of Indonesia (BPK), the implementation of which is governed by the Regulation of the Minister of Finance; c. income from transfer of rights to land and/or building which is received or obtained by the people affected by the Sidoarjo mudflow within the Affected Area Map on March 22, 2007 amounting to Rp41,834,500, (forty-one billion eight hundred thirty-four million and five hundred thousand rupiah), the implementation of which is governed by the Regulation of the Minister of Finance; and d. income

6 - 6 - d. income from absolute write-off of non-principal account receivable sourced from Subsidiary Loan, Investment Fund Account, and Regional Development Account received by the Municipal Waterworks (PDAM) amounting to Rp84,470,000, (eighty-four billion four hundred and seventy million rupiah), the implementation of which is governed by the Regulation of the Minister of Finance. (4) Value Added Tax on Goods and Services and Sales Tax on Luxury Goods Revenue as referred to in paragraph (2) letter b shall be estimated at Rp474,235,340,875, (four hundred seventy-four trillion two hundred thirty-five billion three hundred forty million eight hundred and seventy-five thousand rupiah). (5) Property Tax Revenue as referred to in paragraph (2) letter c shall be estimated at Rp17,710,597,643, (seventeen trillion seven hundred ten billion five hundred ninety-seven million six hundred and forty-three thousand rupiah). (6) Excise Revenue as referred to in paragraph (2) letter d shall be estimated at Rp148,091,229,460, (one hundred fortyeight trillion ninety-one billion two hundred twenty-nine million four hundred and sixty thousand rupiah). (7) Other Tax Revenues as referred to in paragraph (2) letter e shall be estimated at Rp7,414,881,457, (seven trillion four hundred fourteen billion eight hundred eighty-one million four hundred and fifty-seven thousand rupiah). (8) International Trade Tax Revenue as referred to in paragraph (1) letter b shall be estimated at Rp35,871,500,000, (thirtyfive trillion eight hundred seventy-one billion and five hundred million rupiah), which consists of: (11) Further

7 - 7 - a. import duty revenue; and b. export duty revenue. (9) Import duty revenue as referred to in paragraph (8) letter a shall be estimated at Rp33,371,500,000, (thirty-three trillion three hundred seventy-one billion and five hundred million rupiah), which includes Government-borne import duty (BM DTP) amounting to Rp529,493,000, (five hundred twenty-nine billion four hundred and ninety-three million rupiah), the implementation of which is governed by the Regulation of the Minister of Finance. (10) Export duty revenue as referred to in paragraph (8) letter b shall be estimated at Rp2,500,000,000, (two trillion and five hundred billion rupiah). (11) Further provision regarding the detail of Tax Revenue of Fiscal Year 2016 as referred to in paragraph (2) and paragraph (8) shall be governed by the Presidential Regulation. 3. Provision of Article 5 shall be amended so as to read as follows: Article 5 (1) PNBP as referred to in Article 3 letter b shall be estimated at Rp245,083,608,667, (two hundred forty-five trillion eighty-three billion six hundred eight million six hundred and sixty-seven thousand rupiah), which consists of: a. natural resources revenue; b. portion of BUMN (State Owned Enterprises) profit revenue; c. other PNBP; and d. BLU (Public Service Agency) revenue. (2) Natural

8 - 8 - (2) Natural resources revenue as referred to in paragraph (1) letter a shall be estimated at Rp90,524,419,498, (ninety trillion five hundred twenty-four billion four hundred nineteen million four hundred and ninety-eight thousand rupiah), which consists of: a. oil and natural gas natural resources revenue (SDA Migas); and b. non-oil and natural gas natural resources revenue of (SDA Non-Migas). (3) Portion of BUMN profit revenue as referred to in paragraph (1) letter b shall be estimated at Rp34,164,000,000, (thirtyfour trillion one hundred and sixty-four billion rupiah). (4) To optimize the portion of BUMN profit revenue in banking industry, settlement of non-performing loans in BUMN engaged in banking industry shall be carried out: a. in compliance with the provision of legislation in the Limited Liability Company (PT), BUMN, and Banking industries; b. by considering the principle of good corporate governance; and c. by way of performance by the Government of supervision on the settlement of non-performing loans in BUMN engaged in banking industry. (5) Other PNBP as referred to in paragraph (1) letter c shall be estimated at Rp84,123,961,229, (eighty-four trillion one hundred twenty-three billion nine hundred sixty-one million two hundred and twenty-nine thousand rupiah). (6) BLU

9 - 9 - (6) BLU revenue as referred to in paragraph (1) letter d shall be estimated at Rp36,271,227,940, (thirty-six trillion two hundred seventy-one billion two hundred twenty-seven million nine hundred and forty thousand rupiah). (7) Further provisions regarding details of PNBP for Fiscal Year 2016 as referred to in paragraphs (2), (3), (5), and (6) shall be governed by the Presidential Regulation. 4. Provision of Article 6 shall be amended so as to read as follows: Article 6 Grants revenue as referred to in Article 3 letter c shall be estimated at Rp1,975,172,660, (one trillion nine hundred seventy-five billion one hundred seventy-two million six hundred and sixty thousand rupiah). 5. Provision of Article 7 shall be amended so as to read as follows: Article 7 Government Expenditure for Fiscal Year 2016 shall be estimated at Rp2,082,948,885,885, (two quadrillion eighty-two trillion nine hundred forty-eight billion eight hundred and eighty-five million eight hundred eighty-five thousand rupiah), which consists of: a. Central Government Expenditure; and b. Transfer to Regions and Village Fund budget. 6. Provision

10 Provision of paragraphs (1) and (2) of Article 8 shall be amended so as to read as follows: Article 8 (1) Central Government Expenditure as referred to in Article 7 letter a shall be estimated at Rp1,306,695,982,113, (one quadrillion three hundred six trillion six hundred ninety-five billion nine hundred eighty-two million one hundred and thirteen thousand rupiah). (2) Central Government Expenditure as referred to in paragraph (1) shall include foreign loan and/or grant amounting to Rp8,537,306,455, (eight trillion five hundred thirty-seven billion three hundred six million four hundred and fifty-five thousand rupiah), which is then granted and/or subsidized to the regional government. (3) Central Government Expenditure as referred to in paragraph (1) shall be categorized into: a. Central Government Expenditure by Organization; b. Central Government Expenditure by Function; and c. Central Government Expenditure by Program. (4) Further provisions regarding details of Central Government Expenditure by Organization, Function, and Program as referred to in paragraph (3), shall be governed by the Presidential Regulation. 7. Provision of Article 9 shall be amended so as to read as follows: Article 9 (1) Transfer to Regions and Village Fund budget as referred to in Article 7 letter b shall be estimated at Rp776,252,903,772, (seven hundred seventy-six trillion two hundred fifty-two billion nine hundred three million seven hundred and seventy-two thousand rupiah), which consists of: a. Block

11 a. Block Grants; and b. Village Fund. (2) Block Grants as referred to in paragraph (1) letter a shall be estimated at Rp729,270,823,772, (seven hundred twenty-nine trillion two hundred seventy billion eight hundred twenty-three million seven hundred and seventy-two thousand rupiah), which consists of: a. Balancing Fund; b. Regional Incentive Fund; and c. Special Autonomy Fund and Privileges Fund of the Special Region of Yogyakarta. (3) Village Fund as referred to in paragraph (1) letter b shall be estimated at Rp46,982,080,000, (forty-six trillion nine hundred eighty-two billion and eighty million rupiah). (4) Village Fund as referred to in paragraph (3) shall be allocated to every regency/municipality with conditions as follows: a. 90% (ninety percent) is equally allocated to all villages; and b. 10% (ten percent) is equally allocated based on the village s population, poverty rate, area, and geographical accessibility. 8. Provision of Article 10 shall be amended so as to read as follows: Article l0 Balancing Fund as referred to in Article 9 paragraph (2) letter a shall be estimated at Rp705,458,939,888, (seven hundred five trillion four hundred fifty-eight billion nine hundred thirty-nine million eight hundred and eighty-eight thousand rupiah), which consists of: a. General

12 a. General Purpose Grant; and b. Special Purpose Grant. 9. Provision of Article 11 shall be amended so as to read as follows: Article 11 (1) General Purpose Grant as referred to in Article 10 letter a shall be estimated at Rp494,436,692,950, (four hundred ninety-four trillion four hundred thirty-six billion six hundred ninety-two million nine hundred and fifty thousand rupiah), which consists of: a. DBH (Revenue Sharing Fund); and b. DAU (General Allocation Fund). (2) DBH as referred to in paragraph (l) letter a shall be estimated at Rp109,075,845,850, (one hundred nine trillion seventyfive billion eight hundred forty-five million eight hundred and fifty thousand rupiah), which consists of: a. Tax DBH; and b. Natural Resources DBH. (3) Tax DBH as referred to in paragraph (2) letter a shall be estimated at Rp68,619,557,948, (sixty-eight trillion six hundred nineteen billion five hundred fifty-seven million nine hundred and forty-eight thousand rupiah), which consists of: a. Property Tax (PBB); b. Income Tax (PPh) Article 21, Article 25 and Article 29 of Domestic Individual Taxpayer (WPOPDN); and c. Tobacco Product Excise (CHT). (4) Natural

13 (4) Natural Resources DBH as referred to in paragraph (2) letter b shall be estimated at Rp40,456,287,902, (forty trillion four hundred fifty-six billion two hundred eighty-seven million nine hundred and two thousand rupiah), which consists of: a. Oil and Gas; b. Mineral and Coal; c. Forestry; d. Fishery; and e. Geothermal. (5) Utilization of CHT DBH as referred to in paragraph (3) letter c and Oil and Gas DBH as referred to in paragraph (4) letter a and Forestry DBH as referred to in paragraph (4) letter c, shall be regulated as follows: a. Revenue of CHT DBH, either for provincial or for regency/municipal portion, shall be allocated with conditions as follows: 1. At least 50% (fifty percent) to fund the improvement of raw material quality, industrial development, social environmental fostering, socialization of regulations on excise, and/or eradication of illegal goods subject to excise; and 2. At most 50% (fifty percent) to fund activities in accordance with the needs and priority of the region. b. Revenue of Oil and Gas DBH, either provincial or regency/municipal portion, shall be utilized in accordance with the needs and priority of the region, except supplement Oil and Gas DBH for the Province of West Papua and the Province of Aceh which shall be utilized in compliance with the statutory regulations. c. Forestry

14 c. Forestry DBH from Reforestation Fund which represents the portion of regency/municipality, whether distributed in 2016 or the previous years, which is still available in the regional treasury may be utilized for the following: 1. Management of grand forest park; 2. Prevention and control of forest fire; 3. Management of boundaries; 4. Supervision and protection; 5. Tree planting on critical watershed (DAS), bamboo planting on the left and right banks of the river (kakisu), and procurement of soil and water conservation structure; 6. Development of seed cultivation; and/or 7. Research and development, among others, utilization of area, planting of superior domestic forest trees, and implementation of selective cutting and line planting system. (6) DAU as referred to in paragraph (l) letter b shall be allocated at 27.7% (twenty-seven point seven percent) of the net Domestic Revenue (PDN) or estimated at Rp385,360,847,100, (three hundred eighty-five trillion three hundred sixty billion eight hundred forty-seven million and one hundred thousand rupiah). (7) Net PDN as referred to in paragraph (6) shall be calculated based on the sum of Tax Revenue and PNBP, less Government Revenue Shared with Regions. (8) In case of any change in the State Budget resulting in the increase or decrease of net PDN, no change shall be made in the amount of DAU as referred to in paragraph (6). 10. Provision

15 Provision of paragraphs (1), (3), (4), (6) and (7) of Article 12 shall be amended, between paragraphs (2) and (3) of Article 12, 1 (one) paragraph shall be inserted, namely paragraph (2A), and between paragraphs (4) and (5) of Article 12, 2 (two) paragraphs shall be inserted, namely paragraphs (4A) and (4B) and, therefore, Article 12 shall read as follows: Article 12 (1) Special Purpose Grant as referred to in Article 10 letter b shall be estimated at Rp211,022,246,938, (two hundred eleven trillion twenty-two billion two hundred forty-six million nine hundred and thirty-eight thousand rupiah) which consists of: a. Physical DAK; and b. Non-Physical DAK. (2) Allocation of Physical DAK as referred to in paragraph (1) letter a shall be specified with reference to the recommendation of the regions by taking into account the national priority and the financial capacity of the state. (2A) Physical DAK as referred to in paragraph (2), shall include the settlement for shortage in DAK distribution for Fiscal Year (3) Physical DAK as referred to in paragraph (1) letter a shall be estimated at Rp89,809,364,966, (eight-nine trillion eight hundred nine billion three hundred sixty-four million nine hundred and sixty-six thousand rupiah), which consists of: a. Regular DAK amounting to Rp62,342,235,128, (sixty-two trillion three hundred forty-two billion two hundred thirty-five million one hundred and twenty-eight thousand rupiah); b. Regional Public Infrastructure DAK amounting to Rp24,861,399,506, (twenty-four trillion eight hundred sixty-one billion three hundred ninety-nine million five hundred and six thousand rupiah); and c. Affirmation

16 c. Affirmation DAK amounting to Rp2,605,730,332, (two trillion six hundred five billion seven hundred thirty million three hundred and thirty-two thousand rupiah). (4) Regular DAK as referred to in paragraph (3) letter a shall be utilized to fund activities in the following sectors: a. Education amounting to Rp2,665,340,000, (two trillion six hundred sixty-five billion three hundred and forty million rupiah); b. Health and Family Planning amounting to Rp17,393,813,147, (seventeen trillion three hundred ninety-three billion eight hundred thirteen million one hundred forty-seven thousand two hundred and fifty-four rupiah); c. Housing, Settlement, Drinking Water, and Sanitary Infrastructures amounting to Rp729,730,781, (seven hundred twenty-nine billion seven hundred thirty million seven hundred and eighty-one thousand rupiah); d. Food Sovereignty amounting to Rp8,369,713,735,331.O0 (eight trillion three hundred sixty-nine billion seven hundred thirteen million seven hundred thirty-five thousand three hundred and thirty-one rupiah); e. Small Scale Energy amounting to Rp451,570,991, (four hundred fifty-one billion five hundred seventy million nine hundred and ninety-one thousand rupiah); f. Marine and Fishery amounting to Rpl,146,811,913, (one trillion one hundred fortysix billion eight hundred eleven million nine hundred and thirteen thousand rupiah); g. Environment and Forestry amounting to Rp1,396,680,832, (one trillion three hundred ninety-six billion six hundred eighty million eight hundred and thirty-two thousand rupiah); h. Transportation

17 h. Transportation amounting to Rp27,857,740,79l, (twenty-seven trillion eight hundred fifty-seven billion seven hundred forty million seven hundred ninety-one thousand one hundred and fourteen rupiah); i. Trade Infrastructure, Small and Medium Industry, and Tourism amounting to Rp1,465,385,084, (one trillion four hundred sixty-five billion three hundred eighty-five million eighty-four thousand three hundred and one rupiah); j. Regional Government Infrastructure amounting to Rp291,932,782, (two hundred ninety-one billion nine hundred thirty-two million seven hundred and eighty-two thousand rupiah); and k. Settlement for shortage in DAK distribution for Fiscal Year 2015 amounting to Rp573,515,071, (five hundred seventy-three billion five hundred fifteen million and seventy-one thousand rupiah). (4A) Fund amounting to Rp10,345,858,968, (ten trillion three hundred forty-five billion eight hundred fifty-eight million nine hundred and sixty-eight thousand rupiah) derived from Regular DAK as referred to in paragraph (3) letter a shall be allocated for activities with criteria as follows: a. supporting national priories in Government Working Plan c. representing of 2016; b. representing regional authority, including the facilities and infrastructures/sub-infrastructures of roads, bridges, irrigations, markets, and health; c. representing regional needs which, either based on new or existing proposal, have not been fulfilled by DAK in the State Budget for Fiscal Year 2016; and d. applicable by the regional government no later than the end of the Fiscal Year. (4B) Further

18 (4B) Further provision regarding the fund implementation as referred to in paragraph (4A) is governed by the Regulation of the Minister of Finance. (5) Regional Public Infrastructure DAK as referred to in paragraph (3) letter b shall be utilized to fund activities in public infrastructure in accordance with the regional needs. (6) Affirmation DAK as referred to in paragraph (3) letter c shall be utilized to fund the construction/provision of: a. village road and transportation infrastructures in the Transportation Sector amounting to Rp1,672,858,919, (one trillion six hundred seventy-two billion eight hundred fifty-eight million nine hundred and nineteen thousand rupiah); b. irrigation infrastructures in Food Sovereignty Sector amounting to Rp463,822,887, (four hundred sixtythree billion eight hundred twenty-two million eight hundred and eighty-seven thousand rupiah); and c. drinking water and sanitary infrastructure in Housing, Settlement, Drinking Water, and Sanitary Infrastructures Sector amounting to Rp469,048,526, (four hundred sixty-nine billion forty-eight million five hundred and twenty-six thousand rupiah). (7) Non-Physical DAK as referred to in paragraph (1) letter b shall be estimated at Rp121,212,881,972, (one hundred twenty-one trillion two hundred twelve billion eight hundred eighty-one million nine hundred and seventy-two thousand rupiah), which consists of: a. School Operational Assistance (BOS) Fund amounting to Rp43,923,573,800, (forty-three trillion nine hundred twenty-three billion five hundred seventy-three million and eight hundred thousand rupiah); b. Early

19 b. Early Childhood Education Operational Assistance (BOP PAUD) Fund amounting to Rp2,281,900,000, (two trillion two hundred eighty-one billion and nine hundred million rupiah); c. Professional Allowance for Regional Civil Servant Teacher amounting to Rp69,762,709,172, (sixty-nine trillion seven hundred sixty-two billion seven hundred nine million one hundred and seventy-two thousand rupiah); d. Income Supplement for Regional Civil Servant Teachers amounting to Rp1,020,513,000, (one trillion twenty billion five hundred and thirteen million rupiah); e. Local Government s Project and Decentralization (P2D2) Fund amounting to Rp400,000,000, (four hundred billion rupiah); f. Health Operational Assistance (BOK) and Family Planning Operational Assistance (BOKB) Fund amounting to Rp3,559,850,000, (three trillion five hundred fiftynine billion eight hundred and fifty million rupiah); and g. Capacity Building of Cooperative, Small and Medium Business, and Manpower (PK2 UKM and Naker) Fund amounting to Rp264,336,000, (two hundred sixtyfour billion three hundred and thirty-six million rupiah). (8) DAK recipient regions do not provide associate fund. 11. Provisions

20 Provisions of paragraphs (1), (2), and (3) of Article 14 shall be amended, and between paragraphs (2) and (3) of Article 14, 3 (three) paragraphs shall be inserted, namely paragraphs (2A), (2B), and (2C) and, therefore, Article 14 shall read as follows: Article 14 (1) Special Autonomy Fund and Privileges Fund of the Special Region of Yogyakarta as referred to in Article 9 paragraph (2) letter c shall be estimated at Rp18,811,883,884, (eighteen trillion eight hundred eleven billion eight hundred eighty-three million eight hundred and eighty-four thousand rupiah), which consists of: a. Special Autonomy Fund; and b. Privileges Fund of the Special Region of Yogyakarta. (2) Special Autonomy Fund as referred to in paragraph (l) letter a shall be estimated at Rp18,264,433,884, (eighteen trillion two hundred sixty-four billion four hundred thirty-three million eight hundred and eighty-four thousand rupiah), which consists of: a. Allocation of Special Autonomy Fund of Papua Province and West Papua Province amounting to Rp7,707,216,942, (seven trillion seven hundred seven billion two hundred sixteen million nine hundred and forty-two thousand rupiah), to be distributed to Papua Province and West Papua Province with proportion of 70% (seventy percent) and 30% (thirty percent), respectively, with the detail as follows: 1. Special Autonomy Fund of Papua Province amounting to Rp5,395,051,859, (five trillion three hundred ninety-five billion fifty-one million eight hundred and fifty-nine thousand rupiah). 2. Special

21 Special Autonomy Fund of West Papua Province amounting to Rp2,312,165,083, (two trillion three hundred twelve billion one hundred sixty-five million and eighty-three thousand rupiah). b. Allocation of Special Autonomy Fund of Aceh Province amounting to Rp7,707,216,942, (seven trillion seven hundred seven billion two hundred sixteen million nine hundred and forty-two thousand rupiah); and c. Supplement Fund of Infrastructure in the framework of special autonomy of Papua Province and West Papua Province amounting to Rp2,850,000,000, (two trillion eight hundred and fifty billion rupiah) with detail as follows: 1. Supplement Fund of Infrastructure for Papua Province amounting to Rp1,200,000,000, (one trillion and two hundred billion rupiah); 2. Supplement Fund of Infrastructure for West Papua Province amounting to Rp600,000,000, (six hundred billion rupiah); and 3. Addition to Supplement Fund of Infrastructure amounting to Rp1,050,000,000, (one trillion and fifty billion rupiah). (2A) Fund as referred to in paragraph (2) letter c number 3 shall be allocated as follows: a. 75% (seventy-five percent) or amounting to Rp787,500,000, (seven hundred eighty-seven billion and five hundred million rupiah) for West Papua Province; and b. 25% (twenty-five percent) or amounting to Rp262,500,000, (two hundred sixty-two billion and five hundred million rupiah) for West Papua Province. (2B) Fund

22 (2B) Fund as referred to in paragraph (2A) shall be divided between the Province and Regency/Municipality in compliance with the provisions of the statutory regulation. (2C) Utilization of fund as referred to in paragraph (2A) shall be prioritized for road, bridge, and irrigation infrastructures. (3) Privileges Fund of the Special Region of Yogyakarta as referred to in paragraph (l) letter b shall be estimated at Rp547,450,000, (five hundred forty-seven billion four hundred and fifty million rupiah). 12. Provision of paragraph (1) of Article 16 shall be amended so as to read as follows: Article 16 (1) Subsidy Management Program for Fiscal Year 2016 shall be estimated at Rp177,754,491,596, (one hundred seventyseven trillion seven hundred fifty-four billion four hundred ninety-one million five hundred and ninety-six thousand rupiah). (2) Budget for Subsidy Management Program as referred to in paragraph (l) shall be utilized effectively. (3) Budget for Subsidy Management Program as referred to in paragraph (1) may be adjusted to the need of realization in the current fiscal year based on the changes in parameter, the realization of Indonesia Crude Price (ICP), and/or the exchange rate of rupiah. (4) Allocation

23 (4) Allocation as referred to in paragraph (1) shall include deficit for the previous fiscal year to be paid in accordance with the audit result by BPK. (5) Further provisions regarding details of Subsidy Management Program for Fiscal Year 2016 as referred to in paragraph (1) shall be governed by the Presidential Regulation. 13. Provisions of paragraphs (1) and (2) of Article 20 shall be amended so as to read as follows: Article 20 (1) Education Budget shall be estimated at Rp416,589,778,142, (four hundred sixteen trillion five hundred eighty nine billion seven hundred seventy-eight million one hundred and forty-two thousand rupiah). (2) The percentage of the Education Budget shall be 20.0% (twenty point zero percent), which is the ratio of Education Budget allotment as referred to in paragraph (1) to the total State Budget expenditure amounting to Rp2,082,948,885,885, (two quadrillion eighty-two trillion nine hundred forty-eight billion eight hundred eighty-five million eight hundred and eighty-five thousand rupiah). (3) Further provisions regarding details of Education Budget as referred to in paragraph (1), shall be governed by the Presidential Regulation. 14. Between

24 Between Articles 20 and 2l, 1 (one) article shall be inserted, namely Article 20A and, therefore, it shall read as follows: Article 20A (1) Government shall provide Grant to the Regional Government to be utilized as Regional Equity Participation in Municipal Waterworks (PDAM) in order to optimize the efforts in improving the financial condition of PDAM and in settling the state receivable to PDAM which is sourced from subsidiary loan, Investment Fund Account, and Regional Development Account. (2) Grant as referred to in paragraph (1) shall be allocated in Grant expenditure amounting to Rp3,912,436,373, (three trillion nine hundred twelve billion four hundred thirty-six million three hundred and seventy-three thousand rupiah) which is provided to 107 Regional Governments as the owners of PDAMs which are indebted to the Central Government. (3) Grant Expenditure as referred to in paragraph (2) shall be directly deducted from and accounted for as settlement of PDAM s liabilities with respect to the state receivables as referred to in paragraph (1) which shall be recorded as Finance Revenue amounting to Rp883,113,073, (eight hundred eighty-three billion one hundred thirteen million and seventythree thousand rupiah) and Non-Tax Government Revenue amounting to Rp3,029,323,300, (three trillion twentynine billion three hundred twenty-three million and three hundred thousand rupiah). (4) With regard to receipt of the grant as referred to in paragraph (2) the Regional Government shall make non-cash Regional Equity Participation in PDAM. 15. Provisions

25 Provisions of paragraphs (l) and (2) of Article 21 shall be amended so as to read as follows: Article 21 (l) Total amount of the State Budget Revenue for Fiscal Year 2016, as referred to in Article 3, is lower than the State Budget Expenditure as referred to in Article 7 and, therefore, in Fiscal Year 2016 there is budget deficit amounting to Rp296,723,859,977, (two hundred ninety-six trillion seven hundred twenty-three billion eight hundred fifty-nine million nine hundred and seventy-seven thousand rupiah) which will be financed from the Budget Finance. (2) The Budget Finance for Fiscal Year 2016 as referred to in paragraph (1) shall be obtained from the following sources: a. Domestic Finance amounting to Rp299,250,779,509, (two hundred ninety-nine trillion two hundred fifty billion seven hundred seventynine million five hundred and nine thousand rupiah); and b. Net Foreign Finance amounting to negative Rp2,526,919,532, (two trillion five hundred twenty-six billion nine hundred nineteen million five hundred and thirty-two thousand rupiah). (3) Net Foreign Finance as referred to in paragraph (2) letter b shall include foreign loan financing, but exclude the issuance of SBN in the international market. (4) Provision

26 (4) Provision regarding the allocation of Budget Finance as referred to in paragraph (2) shall be as set out in Appendix I hereto. (5) Further provision regarding the detail of allocation of Budget Finance as set out in Appendix I hereto shall be governed by the Presidential Regulation. 16. Between Articles 30 and 3l, 1 (one) article shall be inserted, namely Article 30A and, therefore, it shall read as follows: Article 30A (1) In order to ensure full compensation to the victims of Sidoarjo mudflow for their lands and buildings as shown in the Sidoarjo mudflow affected area map, the mitigation fund amounting to Rp54,339,105, (fifty-four billion three hundred thirtynine million one hundred and five thousand rupiah) shall be allocated. (2) Further provision regarding the allocation of mitigation fund as referred to in paragraph (1) shall be governed by the Presidential Regulation. 17. Provision of paragraph (2) of Article 31 shall be amended so as to read as follows: Article 31 (1) State Owned Property (BMN) as stated in the Activity Checklist (DIK)/Project Checklist (DIP)/Budget Implementation Checklist (DIPA) of the State Ministry/Institution which is used and/or operated by the BUMN and has been recorded in the balance sheet of BUMN as BPYBDS (Undefined Status Government Aid) or other similar account shall be considered as PMN (State Equity Participation) in the said BUMN. (2) Any

27 (2) Any BMN acquired using capital expenditure through DIPA of a State Ministry/Institution and which will be used by a BUMN/Limited Liability Company in which the state holds some of the shares upon the procurement of such BMN, shall be considered as PMN in such BUMN/Limited Liability Company. (3) Proceeds from any project/activity financed by the Budget Portion of State Ministry/State Institution/State General Treasurer (BUN) which have been utilized by Perum Bulog (National Logistics Agency) and Perum Produksi Film Negara (PFN State-Owned Film Production Company) as reviewed by the Finance and Development Supervisory Agency and presented in the audited Central Government Financial Statements (LKPP) for Fiscal Year 2014 shall be reallocated as PMN in such BUMN. (4) Implementation of PMN in BUMN as referred to in paragraphs (1), (2), and (3) shall be stipulated in Government Regulation. 18. Provision of paragraph (2) of Article 37 shall be deleted and, therefore, it shall read as follows: Article 37 (1) In an emergency condition, in the event that any of the following matters occurs: a. the projection of economic growth is below the assumption and deviates from other basic macroeconomic assumptions, leading to significant decline in government revenue and/or significant increase in state expenditure; b. the financial

28 b. the financial system fails to carry out its functions and roles effectively within the national economy; and/or c. significant increase of loan cost, particularly the return on SBN. The Government, upon the approval of the House of Representatives, may perform the following measures: 1. to make expenditure which is not allocated and/or which exceeds the stipulated ceiling in the State Budget for Fiscal Year 2016; 2. to shift the budgeted expenditures from one program to another within the same and/or different budget parts; 3. to reduce the Government Expenditure ceiling in order to improve efficiency while keeping on maintaining the successful achievement of the target priority program; 4. to utilize SAL to cover any deficit in the State Budget finance, after making prior consideration of the availability of SAL required for such purpose up to the end of the current fiscal year and the beginning of the next fiscal year; 5. to use proceeds from drawdown of additional loans and/or issuance of SBN; and/or 6. to extend loans to the Indonesia Deposit Insurance Corporation (LPS) in the event that the LPS undergoes liquidity problems. (2) Deleted. (3) Approval

29 (3) Approval of the House of Representatives as referred to in paragraph (l) shall be the decree as set out in the minutes of Work Meeting of the House of Representatives Budget Committee with the Government, which shall be issued within no more than 1x24 (one time twenty-four) hours upon submission by the Government of the proposal to the House of Representatives. (4) In case of no approval as referred to in paragraph (1) issued by the House of Representatives for any reason whatsoever, the Government may take any of the measures as referred to in paragraph (1). (5) The Government shall give particulars of the implementation of any of the measures as referred to in paragraph (1) in the Amended State Budget for Fiscal Year 2016 and/or the 2016 Central Government Financial Statements (LKPP). 19. Provision of Article 40 shall be amended so as to read as follows: Article 40 A Presidential Regulation regarding Detail of the State Budget for Fiscal Year 2016 shall be enacted as subordinate legislation of this Law no later than July 31, Article II This Law shall come into effect as of the date of its promulgation. For

30 For public cognizance, this Law shall be announced by publishing it in the State Gazette of the Republic of Indonesia. Enacted in Jakarta on July 26, 2016 PRESIDENT OF, Signed. JOKO WIDODO Promulgated in Jakarta On July 27, 2016 MINISTER OF LAW AND HUMAN RIGHTS OF, Signed. YASONNA H. LAOLY STATE GAZETTE OF NUMBER 146 OF 2016 Certified true copy MINISTRY OF STATE SECRETARY OF Assistant Deputy of Economic Affairs Deputy of Law and Legislation Signed and sealed Lydia Silvanna Djaman

31 ELUCIDATION ON LAW OF NUMBER 12 OF 2016 REGARDING AMENDMENT TO LAW NUMBER 14 OF 2015 REGARDING THE STATE BUDGET FOR FISCAL YEAR 2016 I. GENERAL The State Budget (APBN) for Fiscal Year 2016 as stipulated in Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016 is implemented with reference to the provisions stipulated in Law Number 17 of 2003 regarding the State Finance, the Government Working Plan (RKP) of 2016, as well as the Macroeconomic Framework and the Principles of Fiscal Policy for Fiscal Year Since the enactment of Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016, there has been fairly dynamic development of Basic Macroeconomic Assumptions, which have relatively significant impact on the figures stated in the State Budget for Fiscal Year The continuing deterioration of global economy has put pressure on the domestic economy. However, with the proper policy, the performance of the economy in 2016 is expected to be well preserved. The economic growth in 2016 is expected to reach approximately 5.2% (five point two percent) or lower than the assumptions set out in the State Budget for 2016, namely approximately 5.3% (five point three percent). In order to achieve the said target, the Government shall optimize the support of more productive expenditures in strategic sectors. The Inflation

32 - 2 - The inflation rate throughout 2016 is estimated to reach 4.0% (four point zero percent) or lower than the assumptions stated in the 2016 State Budget, namely 4.7% (four point seven percent). Such lower inflation rate is due to the presence of price stability policies and lower oil price. The Government and Bank Indonesia through a synergized policy and coordinated inflation control at the central and regional levels keep trying to control the inflation rate in 2016 at the target range of 4.0% ± 1.0% (four point zero percent with a deviation of one point zero percent). Meanwhile, the average exchange rate of rupiah to the United States dollar in 2016 is expected to reach the balance point of approximately Rp13, (thirteen thousand and five hundred rupiah) per one United States dollar or to strengthen compared to the assumption in the State Budget for Fiscal Year 2016 namely at Rp13, (thirteen thousand nine hundred rupiah) per one United States dollar. In line with the said condition, it is expected that the interest rate of the 3 (three)-month Treasury Bill (SPN) in 2016 can be maintained as assumed in the State Budget for Fiscal Year 2016 at 5.5% (five point five percent). The strengthening of the value of rupiah is influenced by the monetary stimulus policy in Europe, Japan, and China in Furthermore, the Indonesia Crude Price in 2016 is expected to reach an average of USD40 (forty United States dollar) per barrel or lower than the ICP assumed in the State Budget for 2016 namely USD50 (fifty United States of American dollar) per barrel. This situation happens due to significant decline in the world oil price, resulting from abundant supply and lower demand of oil. The realization of oil lifting in 2016 is expected to reach only 820 (eight hundred and twenty) thousand barrels per day, which is lower than the assumption stated in the State Budget for Fiscal Year 2016 namely at 830 (eight hundred and thirty) thousand barrels per day. This situation is primarily caused by natural decline of production capacity and non-optimal production of new oil fields. The natural gas lifting is expected to reach 1,150 (one thousand one hundred and fifty) thousand barrels of oil equivalent per day, lower than the assumption stated in the State Budget for Fiscal Year 2016 namely at l,155 (one thousand one hundred and fifty-five) thousand barrels of oil equivalent per day. Changes

33 - 3 - Changes in the basic macroeconomic assumptions will in turn affect the posture of the State Budget and will be followed by the issuance of various tax policies aimed at making APBN healthy such as, among others, by maintaining the budget deficit at a safe level. It is expected that a favorable condition of domestic economy can facilitate the achievement of national development goals in 2016 which shall be indicated by, among others, the Human Development Index to reach the expected figure of 70.1 (seventy point one) and Gini Ratio of 0.39 (zero point thirty-nine). The Draft Law regarding the Amendment to Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016 was discussed by the House of Representatives and the Government with reference to the considerations of the House of Representatives as contemplated in Decree of the Regional Representative Council Number 57/DPD RI/V/20l dated June 23, Pursuant to the provision of Article 27 of Law Number 17 of 2003 regarding State Finances in conjunction with Article 29 of Law Number 14 of 2015 regarding the State Budget for Fiscal Year 2016, it is necessary to stipulate the amendment to the State Budget for Fiscal Year 2016 in a Law. The discussion regarding this matter was carried out by the Government and the House of Representatives with reference to Ruling of the Constitutional Court Number 35/PUU- XI/2013 dated May 22, II. ARTICLE BY ARTICLE Article I Number 1 Article 3 Number 2

34 Number 2 Article 4 PRESIDENT OF Paragraph (1) Paragraph (2) Paragraph (3) Letter a Letter b The term third party whose income tax is borne by the Government shall mean the third party rendering service(s) to the Government for issuance and/or buyback/exchange of SBN (Government Securities) in the international market, such as marketing agent service and international legal consultant service and exchange/buyer agent service. Letter c Letter d Paragraph (4) Paragraph (5) Paragraph (6) Paragraph (7) Paragraph (8) Paragraph (9)

35 Number 3 PRESIDENT OF Article 5 Paragraph (9) Paragraph (10) Paragraph (11) Paragraph (1) Paragraph (2) Letter a Letter b Non-Oil & Gas SDA (Natural Resources) Revenue from the Forestry sector shall not be designated only as the target of the government revenue, but also a means to maintain forest sustainability. Paragraph (3) Paragraph (a) Pending the amendment to Law Number 49 Prp. of 1960 regarding the State Debt Management Committee, and in order to accelerate the settlement of non-performing loans of BUMN (State Owned Enterprises) engaged in banking industry, the account receivables may be processed through the management mechanism as specified under the regulations regarding limited liability company and banking industry. The granting

36 Number 4 Number 5 Number 6 Number 7 PRESIDENT OF The granting of authority to the General Meeting of Shareholders for and the supervision by the Government of the settlement of non-performing loans of BUMN engaged in banking industry shall be subject to the provisions of laws regarding BUMN. Paragraph (5) Paragraph (6) Paragraph (7) Article 6 Article 7 Article 8 Article 9 Paragraph (1) Paragraph (2) Paragraph (3) Paragraph (4)

37 Number 8 Number 9 PRESIDENT OF Paragraph (4) Data of the number of villages, village s population, poverty rate, area, and geographical accessibility shall be obtained from the relevant ministry and/or institution in charge of the government s statistical affairs. Article 10 Article 11 For any village whose data of its population, poverty rate, and area are unavailable, the data of main village may be used proportionally at 50% (fifty percent), while, with regard to data of village s geographical accessibility, the same data as the main village or the data obtained from the Regional Government shall be used. Paragraph (1) Paragraph (2) Paragraph (3) Letter a Regional portion sourced from the collection cost shall be utilized to fund activities in accordance with the regional needs and priority. Letter b

38 - 8 - Letter b This DBH shall include DBH from Income Tax Article 25 and Article 29 of WPOPDN eligible for final income tax under the Government Regulation Number 46 of 2013 regarding Income Tax of Taxpayers with Certain Gross Income. In order to control the implementation of the State Budget, DBH may not be fully channeled up to the allocated ceiling and, then, it shall be treated as underpaid DBH. Letter c Paragraph (4) Paragraph (5) Letter a Letter b Under this provision, regional governments shall not be required to allocate Oil and Gas DBH at 0.5% (zero point five percent) for basic education supplementary budget. Policy regarding the utilization of Oil and Gas DBH for West Papua Province and Aceh Province shall be implemented pursuant to Law Number 35 of 2008 regarding the Stipulation of the Government Regulation in Lieu of Law Number 1 of 2008 regarding the Amendment to Law Number 21 of 2001 regarding the Special Autonomy for Papua Province to become the Law and Law Number 11 of 2006 regarding the Aceh Government. Letter c

39 - 9 - Letter c This policy results from the changes in policy in the form of authority transfer in the Forestry sector from the regency/municipality to the province as regulated in Law Number 23 of 2Ol4 regarding the Regional Government. Paragraph (6) Paragraph (7) Net PDN (Domestic Revenue) amounting to Rpl,391,194,393,862, (one quadrillion three hundred ninety-one trillion one hundred ninety-four billion three hundred ninety-three million eight hundred and sixty two thousand rupiah) shall be calculated based on the sum of Tax Revenue amounting to Rp1,546,664,648,856, (one quadrillion five hundred forty-six trillion six hundred sixty-four billion six hundred forty-eight million eight hundred and fiftysix thousand rupiah) and PNBP (Non-Tax Government Revenue) amounting to Rp273,849,407,620, (two hundred seventy-three trillion eight hundred forty-nine billion four hundred seven million six hundred and twenty thousand rupiah), less the Government Revenue shared to the Region, which consists of: a. Income Tax Article 25 and Article 29 of Domestic Individual Taxpayer and Income Tax Article 21 amounting to Rp146,200,250,000, (one hundred forty-six trillion two hundred billion two hundred and fifty million rupiah); b. Property Tax (PBB) Revenue amounting to Rp19,408,001,816, (nineteen trillion four hundred eight billion one million eight hundred and sixteen thousand rupiah); c. Tobacco Product Excise Revenue amounting to Rp139,817,757,500, (one hundred thirty-nine trillion eight hundred seventeen billion seven hundred fifty-seven million and five hundred thousand rupiah); d. Oil and Gas Natural Resources (SDA) Revenue amounting to Rp78,617,410,000, (seventy - eight trillion six hundred seventeen billion four hundred and ten million rupiah); e. Mineral