Thu, 05 Jul 2007
Government should not upset over lower tax receipts

Medan (ANTARA News) - The government must not go "berserk" in responding to its decreased income from taxes because the decline is a consequence of the lingering economic crisis and the wretched mentality of its tax collecting personnel, an economic observer here said.

The setback also would not have happened if the government had not set overambitious income targets, Jhon Tafbu Ritonga, an economist at the University of North Sumatra (USU), said on Wednesday.

He said in the 10 years since the 1997 monetary crisis, the number of companies in Indonesia had fallen by 1.5 million. According to economic census figures, there were 16.4 million national companies in Indonesia in 1996 but the number had dropped to 12.5 million by 2006.

What was growing today were non-permanent busineses which numbered 9.8 million and were initiated by people just to survive, he said.

"These non-permanent enterprises generally have difficulty supporting themselves financially, let alone pay taxes," he added.

It was also possible, the decrease had happened because tax collecting officers had been working more for personal gain than the state`s interest by colluding with taxpayers.

"The lower income from taxes must be accepted wisely and not cause the government to go berserk and prompt it to make all sorts of new regulations and create more revenue sources that will eventually only burden businessmen and the people," he said.

What the directorate general of taxes should do following the drop in income was to reconsider its income targets and evaluate its working system, including the mentality of its tax collectors, according to Jhon.

"So far, the government has been pursuing its tax income targets with the sole purpose of raising money without regard of taxpayers` financial capabilty," said Jhon who is also dean of USU`s economic faculty.

Actually, the government should follow the example of chicken breeders who, in order to be assured of growing egg production, take good care of their chickens, Jhon said. (*)


Thu, 05 Jul 2007
From: JakChat
Comment by chewwyUK
I would be interested to know the tax generated by local companies and the tax revenue generated by foreign companies



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