Kamis, Juli 27, 2023

New Framework for Profit-Sharing Funds from Palm Oil Plantations Introduced

In a bid to reduce the fiscal inequality and externalities that have been having a negative impact on economic activities involving palm-oil plantations ("Plantations"), the government has decided to determine other types of profit-sharing funds (Dana Bagi Hasil – "DBH") for Plantation products ("Plantation DBH") through the issuance of Regulation No. 38 of 2023 ("Regulation 38/2023"), which has been in force since 24 July 2023.
At its core, Regulation 38/2023 determines that the ceiling (pagu) for Plantation DBH must be set at a minimum of 4% of the relevant state revenue and should be determined based on the previous year’s revenue.
Plantation DBH itself should be disbursed to regions across Indonesia in line with the following rates: 1) Provinces: 20%; 2) Regencies/cities that produce Plantation products: 60%; and 3) Other regencies/cities: 20%. Allocation details for disbursed Plantation DBH rates should be determined based on the following indicators: 1) Total areas of Plantations; 2) Levels of Plantation productivity; and/or 3) Other indicators, as determined by the Minister of Finance ("Minister").
Once disbursed, Plantation DBH should be utilized in order to finance various activities and should be synergized with other lawful forms of funding. Activities that are eligible to secure financing from Plantation DBH include: 1) The development and maintenance of road infrastructure; and/or 2) Other activities, as determined by the Minister.

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In a bid to reduce the fiscal inequality and externalities that have been having a negative impact on economic activities involving palm-oil plantations ("Plantations"), the government has decided to determine other types of profit-sharing funds (Dana Bagi Hasil – "DBH") for Plantation products ("Plantation DBH") through the issuance of Regulation No. 38 of 2023 ("Regulation 38/2023"), which has been in force since 24 July 2023.
At its core, Regulation 38/2023 determines that the ceiling (pagu) for Plantation DBH must be set at a minimum of 4% of the relevant state revenue and should be determined based on the previous year’s revenue.
Plantation DBH itself should be disbursed to regions across Indonesia in line with the following rates: 1) Provinces: 20%; 2) Regencies/cities that produce Plantation products: 60%; and 3) Other regencies/cities: 20%. Allocation details for disbursed Plantation DBH rates should be determined based on the following indicators: 1) Total areas of Plantations; 2) Levels of Plantation productivity; and/or 3) Other indicators, as determined by the Minister of Finance ("Minister").
Once disbursed, Plantation DBH should be utilized in order to finance various activities and should be synergized with other lawful forms of funding. Activities that are eligible to secure financing from Plantation DBH include: 1) The development and maintenance of road infrastructure; and/or 2) Other activities, as determined by the Minister.

......