Government Regulation Number 16 of 2026 Amends Village Governance and Increases Fixed Income

Introduction

On 27 March 2026, the Government issued Government Regulation Number 16 of 2026 on the Implementing Regulation of Law Number 6 of 2014 on Villages (“GR 16/2026”), which took effect on the same date. This regulation replaces several previous implementing provisions in order to establish a new institutional architecture at the local level. This regulation strengthens the sovereignty of village entities, ensures improved and certain welfare for village government actors, and mandates the implementation of a digital ecosystem in public services and financial administration.

The Government has assessed that villages currently require a more measurable, accountable, and professional performance management system in order to remain competitive. In addition, the Government seeks to address the root causes of uneven welfare among village officials and the high risk of misappropriation of village assets. The Government has set strategic objectives, including accelerating digital governance transformation, safeguarding post-service benefits at the end of village service careers, and providing tangible compensation for villages actively preserving the environment.

 

Comparison

GR 16/2026 revokes and replaces Government Regulation Number 43 of 2014 on the Implementing Regulation of Law Number 6 of 2014 on Villages (“GR 43/2014”), as amended by Government Regulation Number 47 of 2015 and Government Regulation Number 11 of 2019. The comparison of provisions is as follows:

 

Key Provisions

Term of Office of Village Government and Election Procedures

Pursuant to Article 50, the Village Head may serve for 8 (eight) years per term, with a maximum of 2 (two) terms. Meanwhile, under Article 76, members of the BPD serve for 8 years per term, with a maximum of 2 terms. The Village Government is required to restructure the BPD with an odd number of members ranging from 5 to 9 persons. GR 16/2026 standardizes the BPD term to 8 years and ensures 30% representation of women.

In addition, the Government introduces new procedures for resolving Village Head Elections (Pilkades) with a single candidate. Articles 44 and 46 mandate the election committee to extend the registration period. If a single-candidate situation persists, the committee must proceed with the election using a ballot containing one column with the candidate’s photograph and one blank column without any image as an alternative option.

Welfare of Village Apparatus and Post-Service Benefit

Under Articles 87 and 93, the Village Government is required to provide a one-time Post-Service Benefit at the end of the term of office to the Village Head, Village Apparatus, and all leaders and members of the BPD. The financing scheme for this benefit is sourced from the Village Budget (APB Desa) excluding the Village Fund, taking into account the financial capacity of each village. The fixed income is determined at 120% for the Village Head, 110% for the Village Secretary, and 100% for other Village Apparatus, based on the basic salary of Civil Servants Grade II/a with zero years of service. They are entitled to a periodic income increase of 2% every 2 years.

Mandatory Non-Cash Transactions and Budget Transparency

Pursuant to Article 129, the Village Government is required to conduct all budget implementation transactions for village activities in a non-cash form to enhance accountability and reduce the risk of misuse of funds. Exceptions are permitted for villages that face limitations in telecommunications network infrastructure.

The Government will manage all non-cash transaction flows through an integrated village financial information system. If the Village Government fails to comply with this obligation, the Government is authorized to impose administrative sanctions, unless the village can demonstrate genuine infrastructure constraints. Village apparatus are required to periodically disclose essential APB Desa information (such as plans, realization, and tax reports) to the public through information boards, deliberation forums, and digital media.

Ecological Conservation Fund and Prohibition on Asset Collateralization

Through Chapter VIII (Articles 136–141), the Government establishes a new compensation scheme that significantly benefits villages located near ecological buffer zones. Under Article 136, villages geographically located within or directly adjacent to nature reserves, conservation areas, production forests, or plantation areas are entitled to receive Conservation Funds and/or Rehabilitation Funds.

Pursuant to Articles 137 and 138, these funds may be sourced from the State Budget (Non-Tax State Revenue from forestry), Regional Budgets (Revenue Sharing Funds), or third-party grants. The Village Government is required to utilize these funds exclusively for community empowerment programs in forest-adjacent areas, as well as for seedling development, planting, and land restoration maintenance. At the same time, all village officials are prohibited from pledging or using village assets (including village treasury land and markets) as collateral for debt to any institution.

Digitalization and APB Desa Expenditure Ratio

GR 16/2026 regulates the allocation of the Village Budget (APB Desa) as follows:

1. A minimum of 70% is allocated to fund the administration of Village Government (including operational expenditures), implementation of village development, community development, and community empowerment; 
2. A maximum of 30% is specifically allocated to fund fixed income (Siltap), various allowances, Post-Service Benefits, and social security (health and employment) for the Village Head, Village Apparatus, and BPD. 

Status of Civil Servants as Village Apparatus and Institutional Neutrality

Pursuant to Article 71, any Civil Servant appointed as a Village Apparatus must relinquish their civil servant status by resigning and being honorably discharged upon their own request. Meanwhile, for Civil Servants who run for and are elected as Village Heads, Article 41 requires the personnel authority to temporarily release them from their functional or structural civil service positions during their tenure, while preserving their inherent civil servant rights. The Government also ensures institutional neutrality by prohibiting Village Community Institutions (LKD) from affiliating with any political party (Article 170).

 

Transitional Provisions

Pursuant to Article 183, Village Apparatus who hold Civil Servant status as of 27 March 2026 are granted an adjustment period of up to 2 (two) years. If such individuals choose to continue serving as Village Apparatus, they are required to resign from their civil servant status. During this transitional period, such Civil Servants may continue performing their duties at the village office until the Village Government appoints and installs replacement apparatus. Furthermore, Articles 184 and 185 stipulate that the previous fixed income scheme for the Village Head and Village Apparatus remains valid for a maximum of 2 (two) years, and all ongoing cooperation agreements between villages and third parties retain full legal certainty and enforceability until their respective terms expire.

 

Closing

GR 16/2026 reforms village governance by extending the term of office of the Village Head and BPD to 8 years per term (maximum of 2 terms), ensuring 30% representation of women in the BPD, and limiting the allocation of APB Desa to a maximum of 30% for personnel income expenditures. The regulation also establishes a periodic increase scheme for fixed income and mandates the provision of Post-Service Benefits at the end of tenure. Furthermore, GR 16/2026 strengthens accountability through mandatory non-cash transactions, allocates Conservation Funds for villages in ecological areas, and prohibits the use of village assets as collateral for debt. Civil Servants appointed as Village Apparatus are required to resign from their civil service status, with a maximum 2-year transitional period for currently serving Civil Servants.