Aid for the poor<\/p>\n
Most taxpayers who are eligible to pay compulsory donations to
\nhelp poor families have expressed full support for the objective
\nof President Soeharto's latest initiative to step up the poverty-
\nalleviation drive. They are undoubtedly aware of the urgency of
\nmore equitable distribution of incomes because they fully realize
\nthat national stability -- one of the basic prerequisites to
\nsustainable development -- can be maintained only if all members
\nof society share the fruits of economic development.<\/p>\n
In fact, the national stability we have enjoyed over the past
\n30 years should be attributed to the emphasis placed on
\nagricultural and rural development right from the outset of the
\nfirst Five Year Development Plan in 1969.<\/p>\n
The House of Representatives has always supported special
\nprograms in the annual state budget which were designed
\nspecifically to help poor families. Because there are always
\ngroups of people unable to benefit directly from economic
\ndevelopment, special efforts are needed to help them share in
\neconomic growth.<\/p>\n
There have, however, been different views on how the funds to
\nhelp the poor should be raised, used and accounted for. No wonder
\nmost of the reservations regarding President Soeharto's Decree
\nNo. 92\/1996 reflect great concern about transparency and
\naccountability for the funds to be collected.<\/p>\n
Since the decree now makes it compulsory for corporate and
\nindividual taxpayers, with after-tax incomes or profits exceeding
\nRp 100 million (US$42,700) a year, to give 2 percent of their
\nafter-tax incomes to help poor families, the nature of the fund-
\nraising campaign has changed. What is defined by the decree as
\ndonations are seen by taxpayers simply as taxes which, by virtue
\nof the Constitution and tax laws, should be administered and
\naccounted for in the state budget.<\/p>\n
We fully understand and support the President's great concern
\n-- which often reaches the point of obsession -- to abolish
\npoverty. He obviously has been disappointed by the lack of
\nresponse to his moral suasion, through a decree (No.90\/1995) last
\nDecember, for individual and corporate taxpayers of top income
\nbrackets to donate 2 percent of their net incomes or profits to
\nthe poor.<\/p>\n
We reckon that no eligible taxpayer has complained about the
\nextra burden imposed by the President's move. After all, the
\ncountry's highest income tax rate (30 percent) is lower than
\nthose in many other nations. It is the manner in which the 2
\npercent donation has been imposed that is raising questions.<\/p>\n
No taxpayer has questioned the credibility or goodwill of the
\nYayasan Dana Sejahtera Mandiri foundation which was founded early
\nthis year by President Soeharto (in his personal capacity) and
\nseveral business leaders to manage donations to the poverty-
\nalleviation program. Soeharto himself affirmed, during the
\nfoundation's establishment, that all donations to the foundation
\nwould be managed transparently and publicly accounted for. The
\nfoundation's executives include personalities who are well known
\nfor their great concern for the poor. They include tycoons such
\nas Soedono Salim, Sudwikatmono, Anthony Salim and several cabinet
\nministers. Businessman Bambang Trihatmodjo, who is treasurer of
\nthe ruling Golkar group, also acts as treasurer of the
\nfoundation.<\/p>\n
But now that the donations have become compulsory, we see some
\nbenefit in the suggestion that the funds be managed and accounted
\nfor in the state budget. This, we think, supports the House's
\ncampaign to make the government improve its budgetary discipline
\nand facilitate the process of building institutional checks and
\nbalances. Accountability under the state budget, which must be
\napproved by the House, would also avoid unnecessary questions
\nabout the fund- raising campaign, especially in the run-up to the
\ngeneral election in May.<\/p>",
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"sponsor": "Okusi Associates",
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