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

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

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

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

For this reason, efforts that can be made are to revive the role of the private sector in the regions. The trick is to provide space for ease of doing business and investment for the private sector or business actors. Each regional head with his authority can create regulations that are conducive to the business world. This 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, which have high PAD and are independent governments.