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Jakarta tightens belt ahead of year-end

The Jakarta administration and the new City Council have kicked off deliberation of the draft 2020 city budget priorities and ceiling (KUA-PPAS) and plan to hold a meeting marathon amid mounting pressure to complete it before Nov

Sausan Atika (The Jakarta Post)
Jakarta
Sat, October 26, 2019

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Jakarta tightens belt ahead of year-end

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span>The Jakarta administration and the new City Council have kicked off deliberation of the draft 2020 city budget priorities and ceiling (KUA-PPAS) and plan to hold a meeting marathon amid mounting pressure to complete it before Nov. 30, a deadline set by the Home Ministry.

The administration has proposed to the new councillors a budget ceiling of Rp 89.44 trillion (US$6.35 billion), a Rp 6.4 trillion decline from the previous draft submitted in July to the previous city councillors.

As the deliberation of the draft was stalled during the previous period, it proceeded to the new members of the city council who were inaugurated on Aug. 26.

Should they fail to meet the deadline, the Jakarta Council and city administration would be denied their financial rights for six months as an administrative sanction, as stipulated in the 2014 Regional Government Law.

City secretary Saefullah said the administration and the city council had agreed to speed up the deliberations to meet the deadline. He also argued that the proposed budget ceiling was often revised during budgetary planning.

The city administration revealed that the decline in the proposed budget ceiling was due to Rp 6.39 trillion in profit-sharing funds that had not yet been disbursed by the central government. The administration should have received Rp 18.1 trillion in total from the central government.

“The Rp 6.39 trillion [profit-sharing fund] is the central government’s debt to be paid to the city administration in 2020. We still don’t know when the fund will be disbursed to us,” he told reporters at City Hall on Thursday.

The undisbursed funds resulted in the cut of this year’s unused funds (SILPA) predicted to be between Rp 3.08 trillion and Rp 8.51 trillion, because the administration has to use Rp 5.43 trillion of last year’s unused funds to cover its spending.

On the other hand, the administration has yet to reach this year's tax collection target of Rp 44.54 trillion. The city could only manage to collect Rp 31.5 trillion as of mid-October, according to the Jakarta Tax and Levy Agency (BPRD).

Jakarta Governor Anies Baswedan has instructed his subordinates to thoroughly comb the 2020 draft document following the situation.

Saefullah said the administration was currently racking its brains to minimize unnecessary spending until year-end.

“All activities that do not have a direct impact on society will be put on hold. But important sectors like education, health and city infrastructure will keep running,” he said.

The budget savings, for instance, would be used for business trips, stationary and meeting refreshments, he added.

“We would check the urgency of a business trip. We would try to be efficient,” he said.

Saefullah remained upbeat that the administration would collect tax revenue of at least Rp 9 trillion until the end of this year, as he claimed the city had previously managed to collect up to Rp 3.6 trillion in November and Rp 5 trillion in December thanks to the tax relief and tax amnesty.

“We still have 2.5 months to collect Rp 9 trillion,” he added.

BPRD head Faisal Syafruddin said the agency had waived fines for tax arrears from Sept. 16 until Dec. 30 for several types of taxation, namely taxes and levies for hotels, entertainment centers, parking, restaurants, groundwater, properties and vehicles, in an attempt to encourage people to pay off their taxes.

But councillors have raised eyebrows over the decreased proposed budget celing.

A councillor from the Golkar Party, Basri Baco, who is a member of the council’s budgetary committee, said it was important for the city administration to be more transparent about its income sources and suggested better management of financing.

“How much exactly is the city income and what may control the income? We need to be more accountable and transparent on that,” he told The Jakarta Post on Thursday.

A councillor from the Indonesian Solidarity Party (PSI) who is also a member of the budgetary committee, Viani Limanda, questioned the grant funds which she said had kept increasing to various institutions in the past years.

The city administration proposed Rp 2.84 trillion in grant funds, an increase from Rp 2.75 trillion endorsed for this year’s revised city budget (APBD-P).

“Do we really need to allocate that much grant funds ? Meanwhile, there are still a lot of public needs that have not been covered yet,” she said.

Jakarta Financial Management Board (BPKD) head Edi Sumantri explained during the kick-off meeting with the budgetary committee that the grant would be allocated to the Jakarta chapter of the National Land Agency (BPN) office, land certificates, madrassa teachers, the Indonesian military (TNI) and school operational assistance funds (BOS) ranging from the early childhood education center (PAUD) to senior high school level.

“The funds would go back into society,” he said.

Another councillor, Bambang Kusumanto of the National Party (PAN), suggested that the administration reduce the capital injection for several city-owned companies so that the money could be instead allocated to public interests.

The city administration has proposed a capital injection of Rp 8.03 trillion, comprising Rp 2.64 trillion for PT MRT Jakarta, Rp 2.38 trillion for PT Jakarta Propertindo, Rp 1.77 trillion for PD PAM Jaya, Rp 1 trillion for PT Pembangunan Sarana Jaya, Rp 150 billion for PT Food Station Tjipinang, and Rp 92.2 billion for PT Jakarta Tourisindo.

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