Financial Relationships Between Central and Regional Governments Strengthened Through Harmonization of National Fiscal Policy

In 2022, the Indonesian Government introduced Law No. 1 of 2022 on Financial Relations Between the Central Government and Regional Governments (“Law 1/2022”), which was aimed at establishing an effective and efficient allocation of national resources through the strengthening of financial relationships between the central and regional governments.[1] Following the introduction of Law 1/2022, the government has now decided to issue Regulation of the Government No. 1 of 2024 (“Regulation 1/2024”) on the Harmonization of National Fiscal Policy (“National Policy”), which has been in force since 2 January 2024.[2]