Government Ensures The HKPD Law Strengthens Regional Autonomy And Fiscal Decentralization

JAKARTA - The government through the Ministry of Finance (Kemenkeu) stated that the Law on Central and Regional Financial Relations (UU HKPD) is an effort to strengthen regional autonomy and fiscal decentralization.

Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said this policy encourages transparent, accountable and fair management of state finances.

"Regional autonomy and fiscal decentralization are tools to achieve state goals, because both the central government and regional governments must provide services to the same community," he said in an official statement during the Socialization of the HKPD Law in Palembang, quoted on Friday, March 18.

According to Suahasil, various achievements of fiscal decentralization over the last 20 years have shown various positive performances and contributed to the achievement of national performance.

According to him, the gap in financial ability between regions shows a decreasing trend, regional tax revenues to gross domestic product from 2016-2019 have increased, and regional financial administration management is getting better marked by increasing WTP opinions on LKPD.

"Although there are many performances that we can lift positively, there are several that we continue to pay attention to throughout Indonesia which is still our challenges going forward," he said.

Furthermore, Suahasil explained that the challenge that was deemed necessary for a solution was that most of the general allocation fund (DAU) was still used for personnel expenditures, which ranged from 30 percent to 65 percent.

Then, the regional government still relies on special allocation funds (DAK) for capital expenditure sources, the allocation of infrastructure spending is still low at around 11 percent, the tax ratio at the local level is still relatively low, and the use of creative financing is still limited.

"With that way of thinking, we will carry out the four pillars of the HKPD Law in a structured, structured, and written manner in the law," he said.

Suahasil added that the HKPD Law was designed with 4 main pillars, namely decreasing fiscal inequality, strengthening local taxing power, quality regional spending, and national fiscal synergy. These four pillars become very important supports to achieve the goal of implementing decentralization, namely the distribution of welfare of the people throughout Indonesia.

"In addition to the four pillars I mentioned earlier, this must also be supported by an information system, supported by monitoring and evaluation monitoring, and supported by human resources who are increasingly competent," concluded the Deputy Minister of Finance, Suahasil.