The Ministry of Home Affairs has prepared Rp1 trillion for the Achievement Incentive for Districts

Minister of Home Affairs Tito Karnavian / ANTARA/Fath Putra Mulya

JAKARTA - The Ministry of Home Affairs (Kemendagri) has prepared a budget of Rp. 1 trillion for fiscal incentives for high-performing local governments.

Minister of Home Affairs Tito Karnavian in a working meeting with Commission II of the DPR said that the scheme had been implemented in 2026 and was projected to continue next year.

"This year we have been working to carry out the activity of giving awards (awards) to the districts that have achieved achievements, divided into six regions with a budget allocation of Rp. 1 trillion," he said, quoted by ANTARA, Thursday, June 11.

Tito said that the budget had been reallocated by the Ministry of Finance so that it had been reduced.

However, he considered that this program still needed to be maintained to create a competitive climate between regions.

"We still propose that next year a budget of Rp1 trillion be given in order to provide fiscal incentives for the region," he said.

Met after the meeting, the Minister of Home Affairs said that the regional government had achieved various quantitative achievements, such as aspects of controlling inflation, reducing unemployment and poverty, and local original income (PAD).

According to Tito, in addition to being intended for the addition of regional income and expenditure budgets, the award is also aimed at creating a competitive climate so that local governments can improve their performance.

The Minister of Home Affairs explained that the regional fiscal incentive program, which was previously called the regional incentive fund, was in the Ministry of Finance, then transferred to the Ministry of Home Affairs.

"We are not comfortable, the Ministry of Home Affairs continues to pressure, sometimes giving 'punishment', the 'reward' is only a trophy, while the Ministry of Finance provides fiscal incentives. So, I told the Ministry of Finance at that time, please hand over some of it to the Ministry of Home Affairs which held the event so that I would not 'beat-beat' the regional heads," he said.