Abdurrahman agrees to drop VAT plan for agri-products<\/p>\n
JAKARTA (JP): President Abdurrahman Wahid has agreed to drop a
\nplan to impose a value added tax on agricultural products,
\naccording to Minister of Agriculture Bungaran Saragih.<\/p>\n
Bungaran said on Thursday the proposed value added tax would
\nhave caused the products of local farmers to be less competitive
\non the market.<\/p>\n
\"The President has agreed that the value added tax (on
\nagricultural products) will not be imposed,\" he said following a
\nmeeting with Abdurrahman at the Bina Graha presidential office.<\/p>\n
\"We must help our farmers ... so that our agriculture sector
\ncan develop and compete with the agriculture sectors overseas,\"
\nhe said.<\/p>\n
The Ministry of Finance earlier planned to impose a 10 percent
\nvalue added tax on agricultural products as part of a broad
\neffort to boost the revenue of the cash-strapped government in
\nfinancing its various economic reform programs.<\/p>\n
Bungaran dismissed the suggestion that scrapping the value
\nadded tax on agricultural products would prevent the government
\nfrom meeting its 2001 tax target, pointing out that even last
\nyear's tax revenue surpassed the government's target.<\/p>\n
The government plans to raise about Rp 179.89 trillion in tax
\nrevenue in the current budget year, of which some Rp 48.85
\ntrillion is expected to come from value added taxes.<\/p>\n
According to reports, local rice farmers have been faced with
\nlow prices for their products at the start of the current
\nharvest.<\/p>\n
The current market price for dried unhusked rice has dropped
\nto below the minimum Rp 1,500 per kilogram price level set by the
\ngovernment.<\/p>\n
The price dropped because the harvest started earlier than
\nexpected, according to reports.(rei)<\/p>",
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