Wednesday, 11 November 2026
MEDAN | INDATANEWS.COM - The North Sumatra Provincial Government is targeting regional revenue of Rp12.09 trillion for the 2027 financial year, representing a 3.71 per cent increase on the 2026 target of Rp11.66 trillion.
The proposed figure was presented by North Sumatra Acting Regional Secretary Timur Tumanggor during a briefing on the Draft General Budget Policy and Provisional Budget Priorities and Ceilings (KUA-PPAS) for the 2027 Regional Revenue and Expenditure Budget (APBD) to the Budget Committee of the North Sumatra Regional House of Representatives (DPRD).The presentation took place at the North Sumatra DPRD building on Monday, 9 November 2026. Speaking in his capacity as chairman of the Regional Government Budget Team (TAPD), Timur explained that the preparation of the 2027 KUA-PPAS drew on several strategic assumptions, particularly regional fiscal capacity, development requirements and the achievement of development targets.
The provincial government also considered adjustments to personnel expenditure, tax revenue sharing, mandatory spending requirements, intergovernmental transfers and efforts to strengthen regional own-source revenue (PAD).Against this backdrop, the North Sumatra Provincial Government plans to strengthen its own-source revenue by optimising tax and regional levy collections, alongside the introduction of digital innovations.
The administration is also monitoring economic stability and inflation, particularly fluctuations in energy prices, key commodity prices and household purchasing power. These factors will play an important role in ensuring that the regional budget remains realistic and responsive to development needs."Furthermore, regional transfers and fiscal capacity must take into account reductions in central government transfers (DAU, DAK and DBH), changes in national fiscal policy, and adjustments to the potential of regional own-source revenue (PAD) through the optimisation of taxes, levies and digital innovation. Economic stability and inflation control must also consider fluctuations in energy prices, key commodities and people's purchasing power," Timur Tumanggor explained.
Beyond fiscal and economic considerations, the provincial government has included regional economic transformation and improvements in public sector governance as key elements of its budget planning assumptions.The administration also plans to anticipate potential disruptions to development, including natural disasters. In terms of financing, it will apply prudent financial management while exploring innovative funding mechanisms to support regional development programmes.
However, the projected revenue increase comes amid a reduction in financial transfers from the central government. This situation places greater pressure on the provincial administration to strengthen its independent revenue sources while exercising tighter control over public spending.
Meanwhile, regional expenditure for the 2027 financial year is projected to reach Rp12,221,934,629,371. This represents an increase of Rp543,318,806,210, or 4.65 per cent, compared with the 2026 expenditure allocation of Rp11,678,615,823,161.The proposed expenditure therefore exceeds projected revenue by Rp125 billion. The provincial government will need to account for this difference within the financing structure of the regional budget.
Timur stressed that the provincial government must allocate public funds selectively because North Sumatra continues to face limitations in its fiscal capacity. Every programme must have clear objectives, adequate implementation readiness and tangible benefits for the public."We recognise that regional fiscal capacity continues to face various constraints. Therefore, the preparation of the 2027 financial year budget must be selective, disciplined and based on clear priorities. Overlapping programmes, those that are not sufficiently prepared, do not support development targets or fail to deliver adequate benefits need to be rationalised so that available fiscal space can be directed towards more urgent and productive needs," Timur said.
He said the resulting regional budget should have a sound fiscal structure, maintain high standards of spending quality and focus on measurable outcomes. It should also accelerate the realisation of the vision of Kolaborasi Sumut Berkah, towards a more competitive, advanced and sustainable North Sumatra.
Deputy Speaker of the North Sumatra DPRD Ikhwan Ritonga, together with members of the Budget Committee, welcomed the presentation of the draft 2027 KUA-PPAS document.The Budget Committee will subsequently hold further discussions with the Regional Government Budget Team. These deliberations are expected to produce a joint agreement that will serve as the basis for drafting the Regional Regulation on the North Sumatra Regional Revenue and Expenditure Budget for the 2027 financial year.
The next stage of discussions will play an important role in determining North Sumatra's regional revenue and expenditure policies for 2027, particularly as the province faces declining central government transfers and growing demands for development funding. (IDNC)REPORTER: Ahmad Zulfikar | EDITOR: Fik Sagala
