1997\/98 budget too conservative, says economist<\/p>\n
JAKARTA (JP): The revenue target in the draft 1997\/1998 state
\nbudget is too conservative because the government has many ways
\nto increase its revenue, a noted economist said yesterday.<\/p>\n
Rizal Ramli, the director of Econit Advisory Group, said,
\n\"Actually, the government's revenue target can still be increased
\nbecause the 12.9 percent rise envisaged in value added tax
\nreceipts seems too low.\"<\/p>\n
He was speaking to reporters on the draft state budget
\nunveiled by President Soeharto on Monday.<\/p>\n
He said that oil prices on the world market were predicted to
\naverage US$17.5 a barrel this year, while the government had
\nprojected oil tax receipts on the basis of an average oil price
\nof $16.50.<\/p>\n
Director General of Taxes Fuad Bawazier has confirmed that the
\ngovernment would not introduce additional tax measures which
\nwould burden the public, despite the 16 percent targeted increase
\nin tax receipts to Rp 64 trillion ($27.6 billion) for the
\n1997\/1998 fiscal year.<\/p>\n
Rizal said there were still many ways to increase government
\nrevenue without additionally taxing the middle and lower classes
\nmore.<\/p>\n
Rizal said there were three ways by which the government could
\nincrease its revenue: by finding more innovative ways to raise
\nrevenue; by rearranging spending priorities to give more funding
\nto productive activities; and by maximizing the implementation of
\nthe fiscal policy in tackling macroeconomic problems.<\/p>\n
Citing an example, he said the government could increase its
\nroyalties and licensing fees on the exploitation of natural
\nresources in forestry, mining, fisheries and other industries.<\/p>\n
He said decreased revenue from the exploitation of natural
\nresources was caused by a lack of legal certainty.<\/p>\n
Another innovative way to raise revenue was to differentiate
\nthe rate of individual income taxes from corporate income tax
\nrates, he said.<\/p>\n
Tony Prasetiantono, an economist at the University of Gajah
\nMada in Yogyakarta, said the very conservative budget reflected
\nthe government's caution to avoid an economic blowout.<\/p>\n
He said the draft state budget reflected the government's
\ngreat self-confidence because it prioritized the stability of
\nnational development over the short-term objective of pleasing
\nvoters.<\/p>\n
\"Ahead of the general election in May, many analysts predicted
\nthat the 1997\/1998 state budget would be very expansive. But it
\nonly increased by 11.6 percent. This reflects a very strong
\nself-confidence because the government does not feel any pressure
\nof having to please the electorate to gain a majority win,\" he
\nwas quoted by Antara as saying in Yogyakarta.<\/p>\n
He said the state budget would stand as a guarantee of
\nstability for businesspeople, particularly foreign investors.<\/p>\n
A.R. Karseno, another economist at the University of Gajah
\nMada, said the government should not be complacent about
\ndevelopment achievements.<\/p>\n
\"We should look at the economic progress in other countries
\nwhich are our competitors,\" he said.<\/p>\n
He said that compared with most other ASEAN countries such as
\nMalaysia, Singapore and Thailand, Indonesia lagged behind in
\nterms of attracting foreign investment.<\/p>\n
PT Bukaka Teknik Utama's president, Fadel Muhammad, said the
\ndraft state budget was very pleasing for common people because it
\nwould spur regional economic growth.<\/p>\n
He said it contained several projects, under presidential
\ndecrees, which aimed to reduce disparity between the rich and the
\npoor. (bnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/199798-budget-too-conservative-says-economist-1447893297",
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