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[BUSINESS] · Indonesia · 7 sources

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Indonesia Ministry of Finance drafts village fund allocation rules

The Indonesian Ministry of Finance is preparing a Ministerial Regulation (PMK) regarding the procedures for delaying or cutting the General Allocation Fund (DAU) and Revenue Sharing Fund (DBH) to ensure the fulfillment of Village Fund Allocations (ADD).

Under Government Regulation Number 16 of 2026, regencies and cities with villages are required to budget at least 10% of their regional transfer funds (TKD)—derived from DAU and DBH—for village fund allocations every fiscal year. The calculation excludes certain components such as tobacco excise revenue sharing and specific natural resource revenue sharing. The central government will distribute the funds resulting from these adjustments monthly, prioritizing fixed income payments.

Entities

Bank Indonesia · Financial Services Authority · Indonesian Ministry of Finance · Ministry of Finance