ECONOMY AND FINANCE
Riau Province’s economy in 2015 grows by 4,45 percent. The growth emerges in all enterprises, except mining and excavation, and financial services. Other services enterprise grows the highest by 11,24 percent, followed by Real Estate enterprise by 9,98 percent and manufacturing industries by 9,58 percent (View GRDP Table). In The quarter III, there was a deep contraction to 2,62 percent (yoy). It emerges due to the contraction at 3 sectors of enterprises; they are mining, water and gas supply, and industry.
Quarterly, Riau economy in quarter IV-2015 grows by 1,99 percent compared to the previous quarter (qtq). The highest growth is on electricity and gas supply by 8.06; construction by 4,86 percent; and accommodation and food and beverage supply by 4,66 percent.
Regional Budget (APBD)
Regional Budget (APBD) is a benchmark for a success of a region in establishing regional potentials. It is a yearly financial planning of the regional government which is agreed by Regional House of Representatives (DPRD) and assigned by regional regulations. It functions as orientation, planning, supervising, allocation, distribution and stabilization. The total budget allocated in the regional budget is a rationally measured estimation which is achieved for every source of revenue. The revenue can be realized higher than the allocated budget. Related to expendoture, the total of allocated expenditure is the maxiumum value of every type of expenditure. Thus, the expenditure realization cannot be higher that the allocated expenditure.
Diagram above shows that the realization of the regional budget of Riau Province in 2015 is lower compared to 2014 with revenue realization by Rp6.910,63 billion which is only 93,30 percent of the total budget allocated. Besides, the expenditure realization is Rp.5.542,62 billion or only 77,83 percent of the allocated budget. The budget realization of year 2015 is the lowest realization in last three years.
In view of budget deviation in last three years, the regional budget realization of Riau Province has a surplus by Rp.1.368,01 billion in 2015. Besides, the budget allocation has deficit by Rp.562,75 billion in 2013 which then has surplus by Rp.282,37 billion in 2015.
a. Balancing Fund
In accordance with constitution No.33 year 2004 about financial balance between central and regional government, “Balancing fund is fund sourced from National Budget revenue which is allocated to regions to fund the regional needs in implementation of Decentralization”. The balancing fund purposes to reduce some fiscal gap between central and regional government as well as interregional government.
The balancing fund includes tax and non-tax revenue sharing, general allocation fund and certain allocation fund. The regional allocation sourced from these receipts is a full central government authority. In year 2015, total of balancing fund realization of Riau Province with target by Rp2,54 trillion is Rp3,12 trillion. In view of tax and non-tax revenue sharing receipt, realization percentage of year 2015 is 76,47 percent. This realization is the lowest in last three years.
In addition, the percentage of general allocation fund realization is 100 percent respectively in last three years. The percentage of specific allocation fund in year 2015 is the lowest in last three years that is 80 percent in which in year 2013 and 2014, it reaches 100 percent.
b. Tax and Retribution
Tax is public dues for treasury fund in accordance with constitution (so it is requirable) without direct fringe benefits. It is collected under the law in order to cover production cost of collective goods and services to achieve the commonweal.
Regional Tax
According to management institution, regional tax is managed by provincial government, which is signed by Regional Revenue Department of Riau, including:
Vehicle Tax
On-water Vehicle Tax
Vehicle Transfer Duties Tax
Vehicle Fuel Tax
Surface Water Tax
Table above shows that the vehicle fuel tax in 2015 grows by 6,51 percent compared to 2014. Contrarily, the vehicle transfer duties and on-water vehicle tax lowers to 11,55 percent; followed by underground and surface water uptake and utilization tax which lowers to 14,41 percent.
Regional Retribution
Retribution is slightly different from tax. In retribution, there is a direct relationship between achievement (in payment) and compensation. Its payment requires directly mutual services from the government, such as drinking water payment at Water Company, electricity retribution, telephone, gas, tuition, and so forth. It is generally applied and requirable. For example in electricity, if the citizen do not pay for it, there will be certain actions aiming to enforce, such as imposition of fines, temporary termination, and etc.
The regional retribution is categorised into three, they are:
Public Service Retribution
Business Service Retribution
Certain Licensing Retribution
In 2015, value of the regional retribution of Riau Province is Rp 20,504 Billion, increasing 23,33 percent compared to 2014.
Public service retribution receipt increases by 11,56 percent or Rp 1.651 Million compare to year 2014. Business service retribution receipt increases by 95,17 percent or Rp 2.205 million. Certain licensing retribution receipt increases highly by 117,9 percent or Rp 24,2 Million.
c. Locally-generated Revenue (PAD)
In the constitution No. 333 year 2004 about the Financial Balance between Regional and Central Government, it is stated that the regional revenue is sourced from locally-generated revenue, tax and non-tax sharing.
In the regional revenue management, Riau Government strives to increase the locally-generated revenue to reduce the dependence on receipt of the central government so that the implementation of regional autonomy and flexibility is maximally achieved. The strategy used to increase its receipt is committed through intensification and extension as well as optimization of local owned enterprises.
Graphic above shows that in 2015, total locally-generated revenue increases compared to 2014 by 7,13 % or Rp 230 Billion.
GRDP
Gross Regional Domestic Product (GRDP) is simply defined as a whole gross value-added of economical activities in a region. The method of computing the Regional Revenue used is according to reference book of The United Nations which is adjusted to Indonesia, through approaches of production, revenue, and expenditure.
Yearly, GRDP growth in enterprise sector till the end of 2015 is 4,45 percent (yoy). It is higher that the previous quarter which contracts by 1,87 percent. This growth is because of that almost all enterprise sectors grow too, except financial services (-0,69 percent) and mining and excavation (5,5 percent). This growth is mainly sourced from the growth in other services enterprise by 11, 24 percent, followed by real estate by 9,98 percent and manufacturing industry by 9,58 percent.
Quarterly, GRDP growth in enterprise sector in quarter IV-2015 is 1,99 percent (qtq). This growth is because of that all sectors grow. This growth is mainly sourced from the growth in electricity and gas supply enterprise by 8,06 percent, followed by construction enterprise by 4,86 percent and accommodation, and food and beverage supply enterprise by 4,66 percent.
