PRESIDENT OF THE REPUBLIC OF INDONESIA LAW OF THE REPUBLIC OF INDONESIA NUMBER 3 OF 2015 REGARDING

COPY LAW NUMBER 3 OF 2015 REGARDING AMENDMENT TO LAW NUMBER 27 OF 2014 REGARDING STATE BUDGET REVENUES AND EXPENDITURES OF THE FISCAL YEAR 2015 BY THE GRACE OF GOD ALMIGHTY THE, Considering : a. whereas State Budget Revenues and Expenditures of the Fiscal Year 2015 is prepared in accordance with the need of state administration and the capability in accumulating the state revenue for supporting the realization of national economy on the basis of economic democracy with the principle of togetherness, equitable, efficiency, continuity, environmental sense, and self-reliance, in order to achieve safe and peaceful, fair 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 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015, development and changes have occurred in basic assumptions of macroeconomic which are accompanied by changes in the principal fiscal policy and budget shifts between organizational units and/or between programs that cause significant impact in the amounts in State Budget Revenues and Expenditures of the Fiscal Year 2015; c. whereas in order to safeguard the implementation of State Budget Revenues and Expenditures of the Fiscal Year 2015, it is necessary to immediately make adjustments to target state revenue, state expenditure, budget deficit, and the needs and sources of budget financing, in order to be more realistic and capable of supporting the achievement of development goals in 2015 and the medium term; d. whereas...

-2- d. whereas based on considerations as referred to in letters a, b, and c, it is necessary to stipulate a Law regarding Amendment to Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015; In view of : 1. Article 5 paragraph (1), Article 20, 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 1945 Constitution of the State of the Republic of Indonesia; 2. Law Number 17 of 2003 regarding State Finances (Supplement Number 4286 to the State Gazette of the Republic of Indonesia Number 47 of 2003); 3. Law Number 17 of 2014 regarding People Consultative Assembly, House of Representative, Regional Representative Council, and Regional House of Representative (Supplement Number 5568 to the 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 2014 regarding People Consultative Assembly, House of Representative, Regional Representative Council, and Regional House of Representative (Supplement Number 5650 to the State Gazette of the Republic of Indonesia Number 383 of 2014); 4. Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015 (Supplement Number 5593 to the State Gazette of the Republic of Indonesia Number 259 of 2014); With...

-3- With the Joint Approval of THE HOUSE OF REPRESENTATIVE and THE BE IT HEREBY RESOLVED: To stipulate : LAW REGARDING AMENDMENT TO LAW NUMBER 27 OF 2014 REGARDING STATE BUDGET REVENUES AND EXPENDITURES OF THE FISCAL YEAR 2015. Article I Several provisions in Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015 (Supplement Number 5593 to the State Gazette of the Republic of Indonesia Number 259 of 2014) shall be amended as follows: 1. Provision of Article 3 shall be amended, so as to read as follows: Article 3 State Budget Revenue of the Fiscal Year 2015 shall be planned at Rp1,761,642,817,235,000.00 (one quadrillion seven hundred sixty-one trillion six hundred forty-two billion eight hundred seventeen million two hundred and thirty-five thousand rupiah), which is sourced as follows: a. Taxation Revenue; b. PNBP (Non-Tax State Revenue); and c. Grants Revenue. 2. Provision...

-4-2. Provision of Article 4 shall be amended, so as to read as follows: Article 4 (1) Taxation revenue as referred to in Article 3 letter a shall be planned at Rp1,489,255,488,129,000.00 (one quadrillion four hundred eighty-nine trillion two hundred fifty-five billion four hundred eighty-eight million one hundred and twenty-nine 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 planned at Rp1,439,998,598,239,000.00 (one quadrillion four hundred thirty-nine trillion nine hundred ninety-eight billion five hundred ninety-eight million two hundred and thirty-nine 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 revenue. (3) Income Tax revenue as referred to in paragraph (2) letter a shall be planned at Rp679,370,136,164,000.00 (six hundred seventy-nine trillion three hundred seventy billion one hundred thirty-six million one hundred and sixty-four thousand rupiah), which includes income tax borne by Government (PPh DTP) for: a. geothermal...

-5- a. geothermal commodity as much as Rp2,190,000,000,000,00 (two trillion one hundred and ninety billion rupiah), including PPh DTP for deficit in 2012-2014 as much as Rp1,068,970,000,000.00 (one trillion sixtyeight billion nine hundred and seventy million rupiah) of which implementation shall be governed by the Regulation of the Minister of Finance; and b. interest, yields, and third party's income upon the service provided to the Government in issuance and/or re-buy/exchange of SBN (Government Securities) in international market, yet it does not include local legal consultant service, as much as Rp5,990,000,000,000.00 (five trillion nine hundred and ninety billion rupiah), including PPh DTP for deficit in 2012-2013 as much as Rp748,350,000,000.00 (seven hundred fortyeight billion three hundred and fifty million rupiah) of which implementation shall be governed by the Regulation of the Minister of Finance. (4) Value Added Tax of Goods and Services and Sales Tax on Luxury Goods Revenue as referred to in paragraph (2) letter b shall be planned at Rp576,469,166,972,000.00 (five hundred seventy-six trillion four hundred sixty-nine billion one hundred sixty-six million nine hundred and seventy-two thousand rupiah). (5) Property Tax Revenue as referred to in paragraph (2) letter c shall be planned at Rp26,689,881,492,000.00 (twenty-six trillion six hundred eighty-nine billion eight hundred eighty-one million four hundred and ninety-two thousand rupiah). (6) Excise Revenue as referred to in paragraph (2) letter d shall be planned at Rp145,739,923,240,000.00 (one hundred fortyfive trillion seven hundred thirty-nine billion nine hundred twenty-three million two hundred and forty thousand rupiah). 7) Other...

-6-7) Other Tax Revenue as referred to in paragraph (2) letter e shall be planned at Rp11,729,490,371,000.00 (eleven trillion seven hundred twenty-nine billion four hundred ninety million three hundred and seventy-one thousand rupiah). (8) International Trade Tax Revenue as referred to in paragraph (1) letter b shall be planned at Rp49,256,889,890,000.00 (forty-nine trillion two hundred fifty-six billion eight hundred eightynine million eight hundred and ninety thousand rupiah), which consists of: a. import duty revenue; and b. export duty revenue. (9) Import duty revenue as referred to in paragraph (8) letter a shall be planned at Rp37,203,870,000,000.00 (thirty-seven trillion two hundred three billion eight hundred and seventy million rupiah), which includes import duty borne by Government (BM DTP) as much as Rp1,000,000,000,000.00 (one trillion rupiah). (10) Export duty revenue as referred to in paragraph (8) letter b shall be planned at Rp12,053,019,890,000.00 (twelve trillion fiftythree billion nineteen million eight hundred and ninety thousand rupiah). (11) Further provision regarding detail Tax Revenue of Fiscal Year 2015 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 planned at Rp269,075,425,159,000.00 (two hundred sixty-nine trillion seventy-five billion four hundred twenty-five million one hundred and fifty-nine thousand rupiah), which consists of: a. natural...

-7- 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 resources revenue as referred to in paragraph (1) letter a shall be planned at Rp118,919,130,259,000.00 (one hundred eighteen trillion nine hundred nineteen billion one hundred thirty million two hundred and fifty-nine 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 planned at Rp36,956,500,000,000.00 (thirty-six trillion nine hundred fifty-six billion and five hundred million rupiah). (4) For optimizing the portion of BUMN profit revenue in banking industry, settlement of problematic account receivables in BUMN in banking industry shall be carried out: a. in compliance with the provision of legislation in the Limited Liability Company (PT), BUMN, an Banking industries; b. considering the principle of good corporate governance; and c. Government shall conduct supervision on the settlement of problematic account receivable in BUMN in banking industry. (5) Other...

-8- (5) Other PNBP as referred to in paragraph (1) letter c shall be planned at Rp90,109,584,375,000.00 (ninety trillion one hundred nine billion five hundred eighty-four million three hundred and seventy-five thousand rupiah). (6) BLU revenue as referred to in paragraph (1) letter d shall be planned at Rp23,090,210,525,000.00 (twenty-three trillion ninety billion two hundred ten million two hundred and twenty-five thousand rupiah). (7) Further provision regarding detail PNBP of Fiscal Year 2015 as referred to in paragraph (2), paragraph (3), paragraph (5), and paragraph (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 planned at Rp3,311,903,947,000.00 (three trillion three hundred eleven billion nine hundred three million nine hundred and forty-seven thousand rupiah). 5. Provision of Article 7 shall be amended, so as to read as follows: Article 7 State Budget Expenditure of the Fiscal Year 2015 shall be planned at Rp1,984,149,714,865,000.00 (one quadrillion nine hundred eighty-four trillion one hundred forty-nine billion seven hundred fourteen million eight hundred and sixty-five thousand rupiah), which consists of: a. Central Government budget; and b. Block Grants and Village Fund budget. 6. Provision...

-9-6. Provision of paragraph (1), paragraph (2), and paragraph (5) Article 8 shall be amended, so as to read as follows: Article 8 (1) Central Government Budget as referred to in Article 7 letter a shall be planned at Rp1,319,548,973,690,000.00 (one quadrillion three hundred nineteen trillion five hundred forty-eight billion nine hundred seventy-three million six hundred and ninety thousand rupiah). (2) Central Government Budget as referred to in paragraph (1) shall include foreign loan and/or grant as much as Rp4,621,727,025,000.00 (four trillion six hundred twenty-one billion seven hundred twenty-seven million and twenty-five thousand rupiah) which is subsidized to the regional government. (3) Central Government Budget 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) Central Government Budget as referred to in paragraph (1) shall include reward and punishment of the implementation of expenditure budget of State Ministry/Institution of 2013 based in the audit result by Audit Board of the Republic of Indonesia (BPK). (5) Further provision regarding detail Central Government Budget by Organization, Function, and Program as referred to in paragraph (3) shall be governed by the Presidential Regulation. 7. Provision...

-10-7. Provision of Article 9 shall be amended, so as to read as follows: Article 9 (1) Block Grants and Village Fund budget as referred to in Article 7 letter b shall be planned at Rp664,600,741,175,000.00 (six hundred sixtyfour trillion six hundred billion seven hundred forty-one million one hundred and seventy-five thousand rupiah), which consists of: a. Block Grants; and b. Village Fund. (2) Block Grants as referred to in paragraph (1) letter a shall be planned at Rp643,834,541,175,000.00 (six hundred forty-three trillion eight hundred thirty-four billion five hundred forty-one million one hundred and seventy-five thousand rupiah), which consists of: a. Balancing Fund; b. Special Autonomy Fund; c. Privileges Fund of the Special Region of Yogyakarta; and d. Other Transfer Fund. (3) Village Fund as referred to in paragraph (1) letter b shall be planned at Rp20,766,200,000,000.00 (twenty trillion seven hundred sixty-six billion and two hundred million rupiah). 8. Provisions of paragraph (1), paragraph (2), paragraph (3), paragraph (5), paragraph (6), and paragraph (7) of Article 10 shall be amended, between paragraph (7) and paragraph (8) shall be inserted 1 (one) paragraph, namely paragraph (7a), and after paragraph (8) shall be added 1 (one) paragraph, namely paragraph (9), so that Article 10 shall read as follows: Article 10 (1) Balancing Fund as referred to in Article 9 paragraph (2) letter a shall be planned at Rp521,760,517,233,000.00 (five hundred twentyone trillion seven hundred sixty billion five hundred seventeen million two hundred and thirty-three thousand rupiah), which consists of: a. DBH...

-11- a. DBH (Revenue Sharing Fund); b. DAU (General Allocation Fund); dan c. DAK (Special Allocation Fund). (2) DBH as referred to in paragraph (1) letter a shall be planned at Rp110,051,993,705,000.00 (one hundred ten trillion fifty-one billion nine hundred ninety-three million seven hundred and five thousand rupiah). (3) DAU as referred to in paragraph (1) letter b shall be planned at 27.7% (twenty-seven point seven percent) of the net Domestic Revenue (PDN) or shall be planned at Rp352,887,848,528,000.00 (three hundred fifty-two trillion eight hundred eighty-seven billion eight hundred forty-eight million five hundred and twenty-eight thousand rupiah). (4) Net PDN as referred to in paragraph (3) shall be calculated based on the addition between Taxation revenue and PNBP, reduced with State Revenue Shared with the Regions. (5) In case the realization of State Budget results in the increase or decrease of net PDN, the amount of DAU as referred to in paragraph (3) shall not change. (6) DAK as referred to in paragraph (1) letter c shall be planned at Rp58,820,675,000,000.00 (fiftyeight trillion eight hundred twenty billion six hundred and seventy-five million rupiah), which consists of: a. DAK as mush as Rp33,000,000,000,000.00 (thirty-three trillion rupiah); b. Supplement DAK as much as Rp25,820,675,000,000.00 (twenty-five trillion eight hundred twenty billion six hundred and seventy-five million rupiah), which consists of: 1. Affirmation DAK to underdeveloped regency/municipality areas and frontier region with relatively low financial capability as much as Rp2,820,675,000,000.00 (two trillion eight hundred twenty billion six hundred and seventy-five million rupiah); and 2. DAK...

-12-2. DAK for Supporting Working Cabinet Priority Program (P3K2) and DAK proposed by Regional Government which is approved by the House of Representative as much as Rp23,000,000,000,000.00 (twenty-three trillion rupiah). (7) Supplement DAK as referred to in paragraph (6) letter b number 1 shall be allocated for financing activities such as: a. road infrastructure as much as Rp1,812,171,000,000.00 (one trillion eight hundred twelve billion one hundred and seventy-one million rupiah); b. irrigation infrastructure as much as Rp496,405,000,000.00 (four hundred ninetysix billion four and five million rupiah); and c. sanitation and drinking water infrastructure as much as Rp512,099,000,000.00 (five hundred twelve billion and ninety-nine million rupiah). (7a) Supplement DAK as referred to in paragraph (6) letter b number 2 shall be allocated for financing activities such as: a. agriculture as much as Rp4,000,000,000,000.00 (four trillion rupiah); b. irrigation infrastructure as much as Rp3,126,596,993,000.00 (three trillion one hundred twenty-six billion five hundred ninety-six million nine hundred and ninetythree thousand rupiah); c. transportation as much as Rp12,153,853,343,900.00 (twelve trillion one hundred fifty-three billion eight hundred fiftythree million three hundred forty-three thousand and nine hundred rupiah); d. trade infrastructure as much as Rp892,410,299,600.00 (eight hundred ninetytwo billion four hundred ten million two hundred ninety-nine thousand and six hundred rupiah); and e. health as much as Rp2,827,139,363,500.00 (two trillion eight hundred twenty-seven billion one hundred thirty-nine million three hundred sixty-three thousand and five hundred rupiah). 8. Associate...

-13- (8) Associate Fund for Supplement DAK as referred to in paragraph (7) shall be enacted based on the regional financial capability of the regional government in underdeveloped region and frontier, in conditions as follows: a. regional government with very poor financial capability shall be obliged to provide associate fund of at least 0% (zero percent); b. regional government with poor financial capability shall be obliged to provide associate fund of at least 1% (one percent); and c. regional government with medium financial capability shall be obliged to provide associate fund of at least 2% (two percents). (9) Regions receiving supplement DAK as referred to in paragraph (7a) shall be obliged to provide associate fund of at least 0% (zero percent). 9. Provision of Article 11 shall be amended, so as to read as follows: Article 11 (1) Special Autonomy Fund as referred to in Article 9 paragraph (2) letter b shall be planned at Rp17,115,513,942,000.00 (seventeen trillion one hundred fifteen billion five hundred thirteen million nine hundred and forty-two thousand rupiah), which consists of: a. Fund Allocation of Special Autonomy of Papua Province and West Papua Province as much as Rp7,057,756,971,000.00 (seven trillion fifty-seven billion seven hundred fiftysix million nine hundred and seventy-one thousand rupiah), which has been approved to be divided for each with the proportion of 70% (seventy percent) for Papua Province and 30% (thirty percent) for West Papua Province with the detail as follows: 1. Special...

-14-1. Special Autonomy Fund of Papua Province as much as Rp4,940,429,880,000.00 (four trillion nine hundred forty billion four hundred twenty-nine million eight hundred and eighty thousand rupiah). 2. Special Autonomy Fund of West Papua Province as much as Rp2,117,327,091,000.00 (two trillion one hundred seventeen billion three hundred twenty-seven million and ninety-one thousand rupiah). b. Fund Allocation of Special Autonomy of Aceh Province as much as Rp7,057,756,971,000.00 (seven trillion fiftyseven billion seven hundred fifty-six million nine hundred and seventy-one thousand rupiah); and c. Supplement fund for infrastructure in the frame work of special autonomy of Papua Province and West Papua Province as much as Rp3,000,000,000,000.00 (three trillion rupiah) with detail as follows: 1. Supplement fund of infrastructure for Papua Province as much as Rp2,250,000,000,000.00 (two trillion two hundred and fifty billion rupiah); and 2. Supplement fund of infrastructure for West Papua Province as much as Rp750,000,000,000.00 (seven hundred and fifty billion rupiah). (2) Privileges Fund of the Special Region of Yogyakarta as referred to in Article 9 paragraph (2) letter c shall be planned at Rp547,450,000,000.00 (five hundred forty-seven billion four hundred and fifty million rupiah). (3) Other Transfer Fund as referred to in Article 9 paragraph (2) letter d shall be planned at Rp104,411,060,000,000.00 (one hundred four trillion four hundred eleven billion and sixty million rupiah), with detail as follows: a. Professional Allowance for Regional Civil Servant Teacher as much as Rp70,252,670,000,000.00 (seventy trillion two hundred fifty-two billion six hundred and seventy million rupiah); b. Income...

-15- b. Income Supplement for Regional Civil Servant Teachers as much as Rp1,096,000,000,000.00 (one trillion and ninety-six billion rupiah); c. School Operational Assistance (BOS) as much as Rp31,298,300,000,000.00 (thirty-one trillion two hundred ninety-eight billion and three hundred million rupiah); d. Regional Incentive Fund (DID) as much as Rp1,664,510,000,000.00 (one trillion six hundred sixty-four billion five hundred and ten million rupiah); and e. Local Government s Project and Decentralization (P2D2) as much as Rp99,580,000,000.00 (ninety-nine billion five hundred and eighty million rupiah). 10. Provision of Article 12 shall be amended, so as to read as follows: Article 12 Further provision regarding detail Block Grants and Village Fund Budget as referred to in Article 9, Article 10, and Article 11 shall be governed by the Presidential Regulation. 11. Provisions of paragraph (1), paragraph (3), paragraph (4), and paragraph (6) of Article 13 shall be amended, so that Article 13 shall read as follows: Article 13 (1) Subsidy Management Program in Fiscal Year 2015 shall be planned at Rp212,104,385,353,000.00 (two hundred twelve trillion one hundred four billion three hundred eighty-five million three hundred and fifty-three thousand rupiah). (2) Budget for Subsidy Management Program as referred to in paragraph (1) shall be utilized in appropriately targeted. (3) Budget...

-16- (3) Budget for subsidy as referred to in paragraph (1) could be adjusted to the need of realization at the current fiscal year based on the changes in parameter and/or the realization of crude oil price (ICP) and the exchange rate of rupiah. (4) In the event of any changes in the amount of solar subsidy, the Government must have the approval of the House of Representative. (5) Allocation as referred to in paragraph (1) shall include deficit for the previous fiscal year paid in accordance with the audit result by BPK. (6) Further provision regarding detail Subsidy Management Program of Fiscal Year 2015 as referred to in paragraph (1) shall be governed by the Presidential Regulation. 12. Provision of Article 17 shall be amended, so as to read as follows: Article 17 (1) Education Budget shall be planned at Rp408,544,684,304,000.00 (four hundred eight trillion five hundred forty-four billion six hundred eighty-four million three hundred and four thousand rupiah). (2) The percentage of the Education Budget shall be as much as 20.59% (twenty point fifty-nine percent), which is as the comparison of Education Budget allotment as referred to in paragraph (1) to the total State Budget expenditure as much as Rp1,984,149,714,865,000.00 (one quadrillion nine hundred eighty-four trillion one hundred forty-nine billion seven hundred fourteen million eight hundred and sixty-five thousand rupiah). (3) Further provision regarding detail Education Budget as referred to in paragraph (1) shall be governed by the Presidential Regulation. 13. Provisions...

-17-13. Provisions of paragraph (1), paragraph (2), and paragraph (4) of Article 18 shall be amended, and after paragraph (4) shall be inserted 1 (one) paragraph, namely paragraph (5), so that Article 18 shall read as follows: Article 18 (1) Sum of the State Budget Revenue of Fiscal Year 2015, as referred to in Article 3, is smaller than the State Budget Expenditure as referred to in Article 7 so that in Fiscal Year 2015 there is budget deficit as much as Rp222,506,897,630,000.00 (two hundred twenty-two trillion five hundred six billion eight hundred ninety-seven million six hundred and thirty thousand rupiah) which will be financed from Budget Finance. (2) Budget Finance of the Fiscal Year 2015 as referred to in paragraph (1) shall be obtained from the following sources: a. Domestic Finance as much as Rp242,515,005,350,000.00 (two hundred forty-two trillion five hundred fifteen billion five million three hundred and fifty thousand rupiah); and b. Foreign Finance as much as negative Rp20,008,107,720,000.00 (twenty trillion eight billion one hundred seven million seven hundred and twenty thousand rupiah). (3) Net Foreign Finance as referred to in paragraph (2) letter b shall include the payment finance for foreign loan but excluded to the issuance of SBN in the international market. (4) Provision regarding allocation of Budget Finance as referred to in paragraph (2) shall be included in the Appendix hereof. (5) Further provision regarding detail allocation of Budget Finance as set out in the Appendix hereof shall be governed by the Presidential Regulation. 14. Between Article 23 and Article 24 shall be inserted 2 (two) articles, namely Article 23A and Article 23B, so as to read as follows:

-18- Article 23A (1) All Government Investment in the Government Investment Agency shall be diverted into addition to Capital Investment of the State of the Republic of Indonesia in PT Sarana Multi Infrastruktur (Persero). (2) Diversion as referred to in paragraph (1) shall be stipulated in a Government Regulation. Article 23 B (1) In order to perform settlement to people owning land and building in the Sidoarjo mudflow affected area map, fund shall be allocated as much as Rp781,688,212.000.00 (seven hundred eighty-one billion six hundred eighty-eight million two hundred and twelve thousand rupiah). (2) The fund as referred to in paragraph (1) shall represent an anticipation fund loan to pay off land and building purchase of Sidoarjo mudflow victims in the affected area map which is the responsibility of PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya. (3) Anticipation fund as referred to in paragraph (2) may be used in the event that PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya is not able to pay off land and building purchase located in the affected area map based on the audit result of examination of the Finance and Development Supervisory Agency. (4) Further provision regarding the allocation of anticipation fund as referred to in paragraph (2) and paragraph (3) shall be governed by the Presidential Regulation 15. Provision of Article 26 shall exist with amendment to the elucidation on Article 26 paragraph (3) so that the elucidation on Article 26 shall be as stipulated in the elucidation on article by article hereunder. 16. Between...

-19-16. Between Article 31 and Article 32 shall be inserted 1 (one) Article, namely Article 31A so as to read as follows: Article 31A Presidential Regulation regarding Detail State Budget Revenues and Expenditures of the Fiscal Year 2015 which represents implementation hereof shall be enacted no later than March 17, 2015. 17. Provision of Article 32 shall be amended, so as to read as follows: Article 32 During implementing the State Budget of the Fiscal Year 2015, the Government should try to fulfill the target of quality economic growth of which is reflected through: a. declining of poverty to be as much as 10.3% (ten point three percent); b. each economic growth as much as 1% (one percent) could absorb approximately 250.000 (two hundred and fifty thousand) manpower; c. open unemployment level to be as much as 5.6% (five point six percent); d. declining of Gini Ratio to be as much as 0.40 (zero point forty); and e. increasing of Human Development Index (IPM) to be as much as 69.4 (sixty-nine point four). Article II This Law shall come into effect as of the date of its promulgation.

-20- For public cognizance, this Law shall be announced by publishing it in the State Gazette of the Republic of Indonesia. Enacted in Jakarta on March 6, 2015, Signed. JOKO WIDODO Promulgated in Jakarta On March 6, 2015 MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA, Signed. YASONNA H. LAOLY STATE GAZETTE NUMBER 44 OF 2015 Certified true copy MINISTRY OF STATE SECRETARIAT OF THE REPUBLIC OF INDONESIA Assistant Deputy Minister for Legislation on the Economy Signed and sealed Lydia Silvanna Djaman

-21- ELUCIDATION ON LAW NUMBER 3 OF 2015 REGARDING AMENDMENT TO LAW NUMBER 27 OF 2014 REGARDING STATE BUDGET REVENUES AND EXPENDITURES OF THE FISCAL YEAR 2015 I. GENERAL State Budget of Revenues and Expenditures (APBN) of the Fiscal Year 2015 as stipulated in the Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015 is implemented with reference to the provisions set out in Law Number 17 of 2003 regarding the State Finances, based on the Government Working Plan (RKP) of 2015, as well the Macroeconomic Framework and Principles of Fiscal Policy of 2015. Since the stipulation of Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015, the following have occurred: (a) changes in the Government Working Plan (RKP) of 2015 which resulted changes in the principles of fiscal policy including, among others, diversion of allocation of subsidy expenditure to other more productive expenditure in order to encourage economic growth in 2015; (b) budget shifting requirements between organizational units; and (c) financing requirements of new Ministry/Agency new. In connection with the weak global economy, the domestic economy performance in 2015 is estimated to remain well managed. Economic growth in 2015 shall be maintained at the level of 5.7% (five point seven percent). To achieve this target the government will optimize more productive expenditure support in strategic sectors. The inflation rate in the entire year of 2015 is estimated to reach 5.0% (five point zero percent) higher than the State Budget of 2015 at 4.4% (four point four percent). The higher inflation, among others, is influenced by the continued impact of subsidized BBM (fuel) price adjustment policy in 2014. The government and Bank Indonesia through synergized policy and coordination of inflation control at central and regional level are constantly trying to control the rate of inflation in 2015 in order to remain at the range of 2015 inflation target at 4.0% ± 1.0% (four point zero per cent with a deviation of one point zero per cent). Meanwhile,...

-22- -2- Meanwhile, the average exchange rate of Rupiah against United States of America dollar in 2015 is estimated to be at a new point of balance in the range of Rp12,500 (twelve thousand and five hundred rupiah) per one United States of America dollar or weaker than the assumption in the 2015 State Budget, amounting to Rp11,900 (eleven thousand and nine hundred rupiah) per one United States of America dollar. In line with matters mentioned above, the interest rates of 3 (three) month Treasury Bill (SPN) in 2015 are also estimated to be under pressure and stand higher above the 2015 State Budget assumption from 6.0% (six point zero percent) to 6.2% (six point two percent). Pressure on the exchange rate of Rupiah and interest rate of 3 (three) month SPN is estimated to be triggered partly by, among others, the strict global liquidity especially related to the plan to increase benchmark interest rate by the Central Bank of the United States of America in 2015. Furthermore, the price of Indonesian crude oil in 2015 is estimated at an average of US$60 (sixty United States of America dollar) per barrel or lower than the ICP assumption in the 2015 State Budget, amounting to US$105 (one hundred and five United States of America dollar) per barrel. This is due to the significant decline in world oil price, in connection with the excessive supply of oil, especially with the potential use of shale oil and gas. On the other hand, the realization of oil lifting in 2015 is estimated to be realized at 825 (eight hundred and twenty-five) thousand barrels per day, lower than the assumption in the 2015 State Budget, which is set at 900 (nine hundred) thousand barrels per day. Meanwhile, the natural gas lifting is estimated at 1,221 (one thousand two hundred and twenty-one) thousand barrels equal to oil per day, lower than the assumption in the 2015 State Budget, which is set at 1,248 (one thousand two hundred and forty-eight) thousand barrels equal to oil per day. The main cause for this is the natural decline in production capacity and the non-optimal condition of new oil fields. Changes in basic macroeconomic assumptions, which in turn also affect the posture of State Budget, shall be followed by changes in fiscal policy in an attempt to nourish the State Budget through the budget deficit control at a safe level. Conducive domestic economic conditions are expected to support the achievement of national development targets in 2015, indicated by, among others, the Human Development Index reaching 69.4 (sixty-nine point four) and Gini Ratio reaching 0.40 (zero point forty). Session...

-23- -3- Session of Draft Law regarding Amendment to Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015 is carried out by the House of Representatives and the Government by taking into account the Regional Representative Council as stated in the Decree of the Regional Representatives Council Number 16/DPD/II/2014-2015 dated January 28, 2015. In accordance with the provisions of Article 27 of Law Number 17 of 2003 regarding the State Finances in conjunction with Article 29 of Law Number 27 of 2014 regarding State Budget Revenues and Expenditures of the Fiscal Year 2015, amendment to the State Budget Revenues and Expenditures of the Fiscal Year 2015 shall be regulated by the Law. Session of this Law is carried out by the Government and the House of Representatives by taking into account the Verdict of the Constitutional Court Number 35/PUU-XI/2013 dated May 22, 2014. II. ARTICLE BY ARTICLE Article I Number 1 Article 3 Number 2 Article 4 Paragraph (1) Paragraph (2) Paragraph (3) Letter a Letter b...

Number 3 Article 5-24- Letter b Paragraph (4) Third party whose income tax is borne by Government shall mean the third party who provides service to the Government for issuing and/or buying back/ exchanging SBN (Government Securities) in the international market, such as marketing agent service and international legal consultant service and exchange/buyer agent. Paragraph (5) Paragraph (6) Paragraph (7) Paragraph (8) Paragraph (9) Paragraph (10) Paragraph (11) Paragraph (1) Paragraph (2) -4- Letter a Letter b...

-25- Letter b Paragraph (3) Non Oil & Gas SDA (Natural Resources) Revenue sourced from the forestry sector shall not merely be designated as the target of the state revenue; however, it is more designated to safeguarding the forest sustainability. Paragraph (4) While waiting for the amendment of Law Number 49 Prp. of 1960 regarding the State s Account Receivable Affairs Committee, and in order to accelerating the settlement of problematic account receivable in BUMN (State Owned Enterprises) in banking industry, the processing of its account receivable could be conducted through the mechanism of legislation-based management of limited liability company and banking industry. Meanwhile, with regard to provision of authority to the General Meeting of Shareholders and supervision of the Government in the settlement of problematic account receivable in BUMN in banking industry, it shall be based on the provisions under the legislation in BUMN. Paragraph (5) Paragraph (6) Paragraph (7) -5- Number 4 Article 6 Number 5 Article 7 Number 6...

Number 6 Number 7 Article 8 Article 9-26- Paragraph (1) -6- Block Grants of Fiscal Year 2015 for New Autonomous Region (DOB) established in 2014 shall be defined as follows: 1. DBH (Revenue Sharing Fund) a. DBH from Taxes 1) DBH from Individual PPh (Income Tax) and DBH from Non-Oil and Gas PBB (Property Tax) received by the parent region shall be allocated to DOB in accordance with the revenue plan. 2) DBH from Oil and Gas PBB (Property Tax) received by the parent region shall be allocated to DOB proportionally based on the number of population and width of area. 3) DBH from Taxes on equalization fund received by the parent region shall be allocated to DOB equitably. 4) DBH from CHT (Tobacco Product Excise) received by the parent region shall be allocated to DOB proportionally based on the number of population and width of area. b. DBH from SDA (Natural Resources) 1) DBH from SDA of parent region which is a producing region shall be allocated to DOB proportionally based on the number of population and width of area. 2) DBH from SDA of parent region which is not a producing region shall be allocated to DOB equitably. 2. DAU...

-27-2. DAU (General Allocation Fund) a. DAU for DOB shall be allocated after its formation Law is enacted. b. DAU shall be calculated by splitting proportionally with parent region by using data of the number of population and width of area. 3. DAK (Special Allocation Fund) a. In compliance with the mandate of Law of DOB formation, DOB shall be prioritized in receiving allocation of Regional Government Infrastructure DAK. b. Parent Region affected by expansion shall be prioritized in receiving allocation of Regional Government Infrastructure DAK. c. DAK of other areas shall be allocated in the second year by taking into account the preparedness of the regional devices to perform DAK activities. 4. Other Transfer Fund Paragraph (2) Professional allowance for teacher and income supplement for PNSD teachers shall be allocated based on the distribution of data between the number of teachers in parent region and DOB. Paragraph (3) -7- Village fund shall be allocated to regency/municipality based on equally shared allocation to each village and the allocation shall be calculated by taking into account the number of village population, village poverty rate, width of village area, and level of geographical difficulty. The number of villages, village population, village poverty rate, width of village area, and level of geographical difficulty shall be obtained from a Government Institute and/or an authorized Government Statistical Institute. Number 8...

Number 8-28- -8- Article 10 Paragraph (1) Paragraph (2) This DBH shall be included in DBH from Income Tax Article 25 and Article 29 of Domestic Individual Taxpayer whose nature of collection is final under the Government Regulation Number 46 of 2013 regarding Income Tax from the Income of Business that is received or obtained by Taxpayer who as Has certain Gross Income. In order to control the implementation of the State Budget, DBH may not be channeled in full amount of the allocated ceiling, and subsequently it shall be accounted for as underpayment of DBH. Paragraph (3) Paragraph (4) Net PDN (Domestic Revenue) as much as Rp1,273,963,352,085,000.00 (one quadrillion two hundred seventy-three trillion nine hundred sixtythree billion three hundred fifty-two million and eighty-five thousand rupiah) shall be calculated based on the sum between Taxation Revenue as much as Rp1,379,991,627,125,000.00 (one quadrillion three hundred seventy-nine trillion nine hundred ninety-one billion six hundred twenty-seven million one hundred and twenty-five thousand rupiah) and PNBP (Non-Tax State Revenue) as much as Rp410,340,976,934,000.00 (four hundred ten trillion three hundred forty billion nine hundred seventy-six million nine hundred and thirty-four thousand rupiah), deducted with State Revenue shared to the Region, which consists of: a. Income...

-29- -9- a. Income Tax Article 25 and Article 29 of Domestic Individual Taxpayer and Income Tax Article 21 as much as Rp115,707,082,589,000.00 (one hundred fifteen trillion seven hundred seven billion eighty-two million five hundred and eighty-nine thousand rupiah); b. Property Tax (PBB) Revenue as much as Rp26,684,096,175,000.00 (twenty-six trillion six hundred eighty-four billion ninety-six million one hundred and seventy-five thousand rupiah); c. Tobacco Product Excise Revenue as much as Rp120,557,190,000,000.00 (one hundred twenty trillion five hundred fifty-seven billion one hundred and ninety million rupiah); d. Oil and Gas Natural Resources (SDA) Revenue as much as Rp224,263,060,000,000.00 (two hundred twenty-four trillion two hundred sixtythree billion and sixty million rupiah); e. Mineral and Coal SDA Revenue as much as Rp24,599,745,000,000.00 (twenty-four trillion five hundred ninety-nine billion seven hundred and forty-five million rupiah); f. Forestry SDA Revenue as much as Rp3,724,400,000,000.00 (three trillion seven hundred twenty-four billion and four million rupiah); g. Fishery SDA Revenue as much as Rp250,000,001,000.00 (two hundred fifty billion and one thousand rupiah); and h. Geothermal SDA Revenue as much as Rp583,678,209,000.00 (five hundred eightythree billion six hundred seventy-eight million two hundred and nine thousand rupiah). Paragraph (5)...

-30- Paragraph (5) Paragraph (6) Letter a Letter b Paragraph (7) Number 1 Number 2 Paragraph (7a) Paragraph (8) -10- Regency/municipality of underdeveloped region and frontier region shall be stipulated in compliance with the provisions of legislations. The amount of affirmation DAK allocation for underdeveloped regency/ municipality and frontier region shall be calculated based on general criteria, special criteria, and technical criteria. Region receiving DAK for supporting working cabinet priority program shall be stipulated based on special criteria in accordance with the priority of each field. The amount of DAK allocated for supporting working cabinet priority program for each region shall be calculated based on technical criteria of each field. Recipient of DAK proposed by Regional Government which is approved by DPR RI shall be based on the criteria and/or proposal from the region; meanwhile, the amount of DAK allocation for each region shall be stipulated based on proposal from the region by taking in account the available DAK ceiling. Paragraph (9)...

-31- Paragraph (9) -11- Number 9 Article 11 Number 10 Article 12 Number 11 Article 13 Number 12 Article 17 Paragraph (1) In addition to the allocation of Education Budget, the Government manages National Education Development Fund (DPPN), which constitutes the part of educational budget allocation of the previous years that has been accumulated as the endowment fund that is managed by the Educational Fund Management Institute. Result of the management of educational fund shall be utilized to ensure the continuity of education program for the next generation as the form of intergeneration responsibility, such as in the form of scholarship and education fund reserve for anticipating the need of rehabilitation of damaged educational facilities due to disaster. Paragraph (2) Paragraph (3)...

-32- -12- Paragraph (3) Number 13 Article 18 Number 14 Article 23A Paragraph (1) Paragraph (2) Domestic Finance Component, among others, shall be in the form of State Capital Investment (PMN) to Bank Indonesia (BI) as a follow-up to the transfer of Government ownership of quota or capital in the IMF to BI consisting of promissory notes and hard currency. Recording of the transfer of the quota or capital in the Domestic Financing component shall use the net principle which is the net value between Government hard currency in the IMF and bailout fund from BI for the payment of Government capital in International Financial Institution and promissory notes. Paragraph (3) Paragraph (4) Paragraph (5) Paragraph (1) The term Government Investment in the Indonesia Investment Agency shall mean investment funds received from the state budget of 2006 up to 2013, including investments that have been distributed to PT PLN (Persero) and other parties. The amount...

Article 23B -33- The amount of PMN allocation shall be based on the audit result of the Finance and Development Supervisory Agency. Paragraph (2) Paragraph (1) Settlement to people owning land and building in the Sidoarjo mudflow affected area map shall be performed by Sidoarjo Mud Mitigation Agency. Paragraph (2) Anticipation fund shall mean fund prepared by the Government to pay off the people owning land and building in the Sidoarjo mudflow affected area map which, if used, it shall be loan to PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya from the Government. Paragraph (3) Paragraph (4) -13- Matters regulated in Presidential Regulation shall include: 1. Criteria of anticipation funding from the Government to PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya; 2. Items agreed upon between the Government and PT Lapindo Brantas Inc./PT Lapindo Jaya Minarak for the purpose of providing anticipation fund; 3. Type of collateral pledged by PT Lapindo Brantas Inc./PT Lapindo Jaya Minarak to the Government for the purpose of providing anticipation fund in the form of lands that have been compensated by PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya; 4. Mechanism...

-34- -14-4. Mechanism to pay off the people owning land and building in the Sidoarjo mudflow affected area map; and 5. Mechanism to refund anticipation fund by PT Lapindo Brantas Inc./ PT Lapindo Jaya Minarak to the Government. Number 15 Article 26 Paragraph (1) Expenditure exceeding the budget ceiling may be resulted by: 1. Macroeconomic condition that is not in accordance with the predicted condition when the Amendment to the State Budget and/or realization report of the implementing of the First Semester of State Budget of Fiscal Year 2015 is prepared; 2. Impact from the loan restructuring for the management of debt portfolio; 3. Impact from the acceleration of loan disbursement; and 4. Impact from the hedging transaction for the payment of debt interest and expenditure for principal debt installment. Paragraph (2) Implementation of hedging transaction shall be reported by Government in the Financial Statements of Central Government (LKPP) of 2015. Paragraph (3) Paragraph (4)...

-35- Paragraph (4) Shall not constitute the state finance loss shall mean that it is due to the fact that Hedging transaction is designated to protect the debt payment and expense of debt principal interest from the risk of fluctuation of currency and interest rate, and hedging transaction shall not be utilized for speculating to obtain the profit. Paragraph (5) -15- Article II Number 16 Number 17 Article 31A Article 32 Stipulation of the level of poverty shall be in accordance with the calculation method of the National Poverty Line (GKN) carried out by the Statistics Indonesia (BPS). SUPPLEMENT TO THE STATE GAZETTE NUMBER 5669

ALLOCATION OF BUDGET EXPENDITURE 1. DOMESTIC FINANCE -36- APPENDIX LAW NUMBER 3 OF 2015 REGARDING AMENDMENT TO LAW NUMBER 27 OF 2014 REGARDING STATE BUDGET REVENUES AND EXPENDITURES OF THE FISCAL YEAR 2015 Previously 245,894,690,062,000.00 269,709,700,514,000.00 Becomes 222,506,897,630,000.0 0 242,515,005,350,000.0 0 1.1 Domestic Banking 4,467,479,293,000.00 4,785,365,489,000.00 1.1.1 Revenue of the repayment of subsidiary loan installment 4,467,479,293,000.00 4,785,365,489,000.00 1.2 Domestic Non-Banking 265.242.221.221.000.00 237,729,639,861,000.0 0 1.2.1 Asset Management Outcome 350,000,000,000.00 350,000,000,000.00 1.2.2 Net Government Securities 277,049,800,000,000.00 297,698,382,000,000.0 0 1.2.3 Net domestic loan 1,621,190,000,000.00 1,690,600,000,000.00 1.2.3.1 Disbursement of gross domestic loan 2,000,000,000,000.00 2,000,000,000,000.00 1.2.3.2 Payment of the domestic principal installment -378,810,000,000.00-309,400,000,000.00 1.2.4 Government Investment Fund -12.647.146.779.000.00-58,844,130,927,000.00 1.2.4.1 Investment Recovery 778,320,274,000.00 19,134,920,274,000.00 1.2.4.2 State Capital Investment (PMN) -7,319,167,053,000.00-70,372,751,201,000.00 1.2.4.2.1 PMN to BUMN -5,107,307,000,000.00-64,883,907,000,000.00 1.2.4.2.1.1 PT PAL Indonesia -1,500,000,000,000.00-1,500,000,000,000.00 1.2.4.2.1.2 PT Sarana Multigriya Finansial -1,000,000,000,000.00-1,000,000,000,000.00 1.2.4.2.1.3 PT Geo Dipa Energi -607,307,000,000.00-607,307,000,000.00 1.2.4.2.1.4 PT Sarana Multi Infrastruktur -2,000,000,000,000.00-20,356,600,000,000.00 1.2.4.2.1.5 PT Penjaminan Infrastruktur Indonesia 0.00-1,500,000,000,000.00 1.2.4.2.1.6 Perum Bulog 0.00-3,000,000,000,000.00 1.2.4.2.1.7 PT Pertani 0.00-470,000,000,000.00 1.2.4.2.1.8 PT Sang Hyang Seri 0.00-400,000,000,000.00 1.2.4.2.1.9 PT Perikanan Nusantara 0.00-200,000,000,000.00 1.2.4.2.1.10 Perum Perikanan Indonesia 0.00-300,000,000,000.00 1.2.4.2.1.11 PT Garam 0.00-300,000,000,000.00 1.2.4.2.1.12 PT Perkebunan Nusantara III 0.00-3,150,000,000,000.00 1.2.4.2.1.13 PT Perkebunan Nusantara VII 0.00-17,500,000,000.00 1.2.4.2.1.14 PT Perkebunan Nusantara IX 0.00-100,000,000,000.00 1.2.4.2.1.15 PT Perkebunan Nusantara X 0.00-97,500,000,000.00 1.2.4.2.1.16...

-37- -2-1.2.4.2.1.16 PT Perkebunan Nusantara XI 0.00-65,000,000,000.00 1.2.4.2.1.17 PT Perkebunan Nusantara XII 0.00-70,000,000,000.00 1.2.4.2.1.18 PT Permodalan Nasional Madani 0.00-1,000,000,000,000.00 1.2.4.2.1.19 PT Angkasa Pura II 0.00-2,000,000,000,000.00 1.2.4.2.1.20 PT Angkutan Sungai. Danau. dan Penyeberangan 0.00-1,000,000,000,000.00 1.2.4.2.1.21 PT Pelni 0.00-500,000,000,000.00 1.2.4.2.1.22 PT Djakarta Lloyd 0.00-350,000,000,000.00 1.2.4.2.1.23 PT Hutama Karya 0.00-3,600,000,000,000.00 1.2.4.2.1.24 Perum Perumnas 0.00-1,000,000,000,000.00 1.2.4.2.1.25 PT Waskita Karya Tbk. 0.00-3,500,000,000,000.00 1.2.4.2.1.26 PT Adhi Karya Tbk. 0.00-1,400,000,000,000.00 1.2.4.2.1.27 PT Dok dan Perkapalan Surabaya 0.00-200,000,000,000.00 1.2.4.2.1.28 PT Dok dan Perkapalan Kodja Bahari 0.00-900,000,000,000.00 1.2.4.2.1.29 PT Industri Kapal Indonesia 0.00-200,000,000,000.00 1.2.4.2.1.30 PT Dirgantara Indonesia 0.00-400,000,000,000.00 1.2.4.2.1.31 PT Aneka Tambang Tbk. 0.00-3,500,000,000,000.00 1.2.4.2.1.32 PT Pindad 0.00-700,000,000,000.00 1.2.4.2.1.33 PT Kereta Api Indonesia 0.00-2,000,000,000,000.00 1.2.4.2.1.34 PT Perusahaan Pengelola Aset 0.00-1,000,000,000,000.00 1.2.4.2.1.35 PT Pelabuhan Indonesia IV 0.00-2,000,000,000,000.00 1.2.4.2.1.36 PT Bahana Pembinaan Usaha Indonesia 0.00-250,000,000,000.00 1.2.4.2.1.37 PT Pengembangan Pariwisata Indonesia 0.00-250,000,000,000.00 1.2.4.2.1.38 PT Perusahaan Listrik Negara 0.00-5,000,000,000,000.00 1.2.4.2.1.39 PT Askrindo dan Perum Jamkrindo 0.00-1,000,000,000,000.00 1.2.4.2.2 PMN to international financial organization/in stitution -433,539,779,000.00-250,523,927,000.00 1.2.4.2.2.1 International Bank for Reconstruction And Development (IBRD) -169,359,779,000.00-177,898,927,000.00 1.2.4.2.2.2 International Fund for Agricultural Development (IFAD) -47,600,000,000.00-50,000,000,000.00 1.2.4.2.2.3 International Development Association (IDA) -216,580,000,000.00-22,625,000,000.00 1.2.4.2.3...