SUMMARY :

• Parliament approved a Rp 763.6 trillion (USD 83.4 billion) FY 2007 budget on October 17. 
  
• Spending for personnel, materials and social programs is slated to rise significantly in 2007 
  in line with President Yudhoyono's plans to reform the civil service and improve health 
  and education standards in the country. 
  
• Spending on fuel and electricity subsidies is set to decline slightly in 2007, but continues to
  account for 17 percent of central government expenditures. 
  
• The Government of Indonesia (GOI) expects a 20% increase in tax receipts in 2007. 
  
• Despite the spending increases, Indonesia's fiscal policy remains tight, with a projected 
  deficit of 1.1% of GDP, down from the 1.3% of GDP target for FY 2006. 

• The GOI's 2007 financing plan includes an anticipated Rp 3.3 trillion in privatization receipts, 
  Rp 1.3 trillion of which the GOI will plow back into "equity injections" in state-owned enterprises. 
  
• For the second year in a row, the budget also contains a Rp 2 trillion ($218 million) financing 
  line item to support the GOI's infrastructure development program.

Items (*)

FY 2006

FY 2007

Rp trillion

% of GDP

Rp trillion

% of GDP

A. Total revenue

659.1

21.1

723.1

20.5

I.   Domestic revenues

654.9

21.0

720.4

20.4

     Tax revenues

425.0

13.6

509.5

14.4

      - Domestic taxes

410.2

13.2

494.6

14.0

        Income tax

213.7

6.9

261.7

7.4

        1. Oil and gas

38.7

1.2

41.2

1.2

        2. Non oil and gas

175.0

5.6

220.5

6.2

        Value added tax

132.9

4.3

161.0

4.6

        Land/building tax

18.1

0.6

21.3

0.6

        Duties on land/building transfer

4.4

0.1

5.4

0.2

        Excise tax

38.5

1.2

42.0

1.2

        Other taxes

2.6

0.1

3.2

0.1

      - International trade tax

14.8

0.5

14.9

0.4

      Non tax revenues

229.8

7.4

210.9

6.0

      - Natural resources

165.7

5.3

146.3

4.1

      - SOE profits

22.3

0.7

19.1

0.5

      - Other

41.8

1.3

45.6

1.3

II.    Grants

4.2

0.1

2.7

0.1

B.   Expenditures

699.1

22.4

763.6

21.6

I.    Central government expenditures

478.2

15.3

504.8

14.3

      Routine

135.3

4.3

170.4

4.8

      - Personnel

79.2

2.5

98.5

2.8

      - Material expenditures

56.1

1.8

71.9

2.0

      Capital expenditures

69.5

2.2

76.9

2.2

      Interest payments

82.5

2.6

85.1

2.4

      Subsidies

107.6

3.5

102.9

2.9

      Social assistance

41.0

1.3

50.7

1.4

      Other current expenditures

42.3

1.4

18.8

0.5

II.    Transfer to regions

220.8

7.1

258.8

7.3

Primary balance

42.5

1.4

44.6

1.3

Overall balance

-40.0

-1.3

-40.5

-1.1