Patching Fiscal Holes
Regional governments are scrambling to raise revenue. A more humane approach to tax collection can be more effective than relying on law enforcement.
On Tuesday, August 4, 2026, a long queue of vehicles formed around the Mitra gas station in Kupang, East Nusa Tenggara, as motorists queued to fill up with subsidized fuel. Gas station worker Rio confirmed that the station continued to serve all vehicles, regardless of origin, as reported by Tempo English Magazine.
Despite this, the East Nusa Tenggara Provincial Government had enacted Governor's Regulation No. 13/2025 to regulate vehicle and fuel tax optimization. The regulation prohibits tax delinquents and out-of-province registered vehicles from receiving subsidized fuel. The measure aimed to tackle two key issues: firstly, the influx of out-of-province vehicles utilizing subsidized fuel without transferring their registration to the province; and secondly, the low compliance rate in vehicle tax payments.
The East Nusa Tenggara Regional Finance Agency's Head of the Budget Division, Ronald Amapiran, explained that these issues stemmed from the influx of out-of-province vehicles consuming subsidized fuel and the insufficient collection of vehicle taxes. The government's financial situation had deteriorated, with transfers to regions falling by Rp292.8 billion (approximately US$16.4 million) to Rp2.81 trillion (US$158 million) this year.
Additionally, the province received only Rp1.64 trillion (US$92 million) in general allocation funds, while civil servants' salaries and allowances required Rp1.82 trillion (US$102 million), resulting in a shortfall of Rp181 billion (US$10 million).
To bridge this funding gap, Ronald emphasized the need to generate revenue locally.
Written by urgent.news from Tempo.co English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
