The Ministry of Finance ( id, Kementerian Keuangan) is an Indonesian government ministry responsible for the nation's finance and state assets. The

Finance Minister A finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation. A finance minister's portfolio has a large variety of names around the world, such as "treasury", " ...

is responsible to the President. The ministry's motto is ''Nagara Dana Rakça'', which means "guardian of state finance".

History

Colonial Period

The

Dutch East India Company The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock ...

was given ' to print money during the rule of Governor General

Jan Pieterszoon Coen Jan Pieterszoon Coen (, 8 January 1587 – 21 September 1629) was an officer of the Dutch East India Company (VOC) in the early 17th century, holding two terms as governor-general of the Dutch East Indies. He was the founder of Batavia, ...

. Since the 17th century, the Dutch East India Company increased state revenue. The company raised state revenue by an obligation to surrender agricultural products ('), restrictions on agricultural production (', which increased the price) and obligations to plant strategic agricultural products such as coffee ('). When the British took over Dutch East India as part of the

War of the Sixth Coalition In the War of the Sixth Coalition (March 1813 – May 1814), sometimes known in Germany as the Wars of Liberation, a coalition of Austria, Prussia, Russia, Spain, the United Kingdom, Portugal, Sweden, and a number of German States defeated F ...

and assigned

Stamford Raffles Sir Thomas Stamford Bingley Raffles (5 July 1781 – 5 July 1826) was a British statesman who served as the Lieutenant-Governor of the Dutch East Indies between 1811 and 1816, and Lieutenant-Governor of Bencoolen between 1818 and 1824. He is ...

as Lieutenant-Governor, he instituted reformation through land tax ('), which changed the former Dutch system, to enable the public to buy British products with money. This reform failed to introduce a standardized monetary system because of a lack of support from the local aristocracy and inadequate public knowledge of money and taxation calculation. After the

Napoleonic Wars The Napoleonic Wars (1803–1815) were a series of major global conflicts pitting the French Empire and its allies, led by Napoleon I, against a fluctuating array of European states formed into various coalitions. It produced a period of Fren ...

, Dutch East India was returned to the Dutch by the British under the

Anglo-Dutch Treaty of 1814 The Anglo-Dutch Treaty of 1814 (also known as the Convention of London; nl, Verdrag van Londen) was signed by the United Kingdom and the Netherlands in London on 13 August 1814. The treaty restored most of the territories in Java that B ...

. Governor General Du Bus resumed economic development and established ' as part of financial and payment system reform. In 1836, van den Bosch introduced forced plantation (') to produce global-favored products. Forced plantation replaced the land tax system and aimed to introduce monetary economics to society. Forced plantation and forced labor had sufficient effect to introduce monetary economics. Government policy was shifted into liberal economics. The policy was implemented as "''laissez faire, laissez passer''", in which economic responsibility is shifted to the private sector. The Department of Finance (') was established to coordinate, develop and support financial administration. Centralized financial administration was done to facilitate management of state revenue and expenditure. The

Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

put the Dutch colonial government in a difficult position. Before the Japanese landing, the President of De Javasche Bank, Dr. G.G. van Buttingha Wichers, sent gold deposits to

South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...

and

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

from

Cilacap Cilacap Regency ( jv, ꦏꦨꦸꦥꦠꦺꦤ꧀ꦕꦶꦭꦕꦥ꧀, also spelt: Chilachap, old spelling: Tjilatjap, Sundanese: ) is a regency () in the southwestern part of Central Java province in Indonesia. Its capital is the town of Cilacap. ...

. The Japanese colonial government forced the surrender of British, Dutch and Chinese Bank and invasion money. The war created a financial crisis.

Early Independence

After Japan's surrender to the Allied powers in August 1945,

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...

declared independence. Ministry of Finance is officially established to replace the function of ''Departement van Financien''. The economic situation was dire because of high inflation (due to circulation of ''De Javasche'' Bank money, Dutch East Indies money and Japanese

Yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the e ...

). Dr. Samsi, as Minister of Finance, had information that Escompto Bank in Surabaya held reserve money from the Dutch Colonial Government.

Organization

Based on Presidential Decree No. 57/2020, Ministry of Finance is organized into the following: * Office of the Deputy Minister of Finance * Secretariat General * Directorate General of the State Budget * Directorate General of Taxes * Directorate General of Customs and Excise * Directorate General of the Treasury * Directorate General of State Assets Management * Directorate General of Fiscal Balance * Directorate General of Debt and Risk Management * Inspectorate General * Fiscal Policy Agency * Education and Financial Training Agency * Expert in Tax Law and Enforcement * Expert in Tax Conformity * Expert in Tax Supervision * Expert in State Revenue * Expert in State Expenditure * Expert in Macroeconomics and International Finance * Expert in Financial Services and Stock Market * Expert in Organization, Bureaucracy, and Information Technology * Expert in Legal and Inter-agency Relationship

Task and Functions

Ministry of Finance Tasks and Functions are regulated by Presidential Decree No. 57/2020,

Task

To run governance in terms of state finance in order to assist the President in running state governance.

Functions

Formulating, stipulating, and implementing policies in terms of budgeting, taxes, customs and excise, treasury, state assets management, fiscal balance, and budget financing and risk management; Formulating, stipulating and providing recommendations in fiscal and financial sector policies; Coordinating tasks implementation, developing, and providing administration support to entire elements of organization in the Ministry of Finance; Managing State properties/assets that are under the responsibility of the Ministry of Finance; Supervising tasks implementation in the Ministry of Finance; Holding technical guidance and supervision for the Minister of Finance’s affairs in regions; Implementing technical activities from central to regions; Holding education, training, and competence certification in terms of State finance; and Providing substantial support to entire elements of organization in the Ministry of Finance

List of Minister of Finance

References

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Finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

Finance in Indonesia