Indonesian local governments urged to boost PAD and curb TKD dependence

Indonesia’s central and regional leaders are intensifying efforts to increase local fiscal autonomy. Bupati Hanindhito Himawan Pramana of Kediri said, “Kemandirian fiskal akan terus diupayakan melalui peningkatan PAD,” outlining measures such as online tax payments, database optimisation, digital tax reporting and strengthening of BUMD enterprises. The push aims to raise Pad and reduce reliance on central transfers.

Members of the national parliament echoed the call. DPR budget committee member Taufan Pawe warned that some heads of local governments still use cuts to the General Allocation Fund (TKD) as a “classic excuse,” urging innovators to seek new revenue sources. He noted that only about 30 % of Indonesia’s provinces and cities have strong fiscal capacity. The Ministry of Finance’s director‑general of fiscal balance, Askolani, said TKD will remain for low‑capacity regions but that incentives will be offered to those that improve PAD performance.