Revitalizing the Private Sector, Badung Regency Achieves Fiscal Independence

Ease of doing business and investment will encourage a region's fiscal independence. Badung Regency, Bali Province, for example, as much as 91 percent of its regional income originating from PAD cannot be separated from the contribution of the private sector or business actors in paying regional taxes.

Gianie
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1 Minute
By: Gianie
Revitalizing the Private Sector, Badung Regency Achieves Fiscal Independence
Photo by Apri Silla Ardianti / Unsplash

Ease of doing business and investment will encourage the fiscal independence of a region. Badung Regency, Bali Province, for example, derives 91 percent of its regional income from Locally-Generated Revenue (PAD), which is inseparable from the contribution of the private sector or business actors in paying regional taxes.

With the largest income from PAD, Badung Regency is the most fiscally independent regency of all regencies in Indonesia. In 2024, the realization of the Badung Regency government's revenue reached IDR 8.8 trillion. A total of IDR 7.5 trillion came from PAD (85 percent). 

For 2025, the Badung Regency Government is targeting an increase in revenue to IDR 10.6 trillion. A total of IDR 9.7 trillion (91 percent) is targeted from PAD. Revenue sourced from central government transfer funds is only IDR 899.8 billion or 8.4 percent. It can be said that the region's dependence on transfer funds from the central government is relatively low. 

Minister of Home Affairs Tito Karnavian at the Inauguration of the Board of Management of the Association of Regency Governments Throughout Indonesia (Apkasi) on July 17, 2025, in Jakarta, encouraged every regional head to increase their fiscal independence through increased PAD. 

For this reason, an effort that can be made is to revive the role of the private sector in the regions. The way to do this is to provide space for ease of doing business and investment for the private sector or business actors. Every regional head with their authority can create regulations that are conducive to the business world. This also includes empowering and improving the governance of Regional Owned Enterprises (BUMD) and Regional Public Service Agencies (BLUD). 

If this is done, regencies like Badung Regency will grow, with high PAD and independent governments.

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