Govt criticized for revoking foreign exchange tax policy<\/p>\n
JAKARTA (JP): The government was strongly criticized yesterday
\nfor revoking a decree on a planned 5 percent income tax for
\nforeign exchange purchases.<\/p>\n
Legal expert Dimyati Hartono and corporate lawyer Todung Mulya
\nLubis agreed the move did not encourage the much-needed legal
\ncertainty needed in the country.<\/p>\n
They also agreed Minister of Finance Fuad Bawazier should have
\nconsidered various legal aspects before issuing or revoking the
\ndecree.<\/p>\n
Dimyati, a law professor at the University of Indonesia, said
\nthe decision could harm both national and international
\nconfidence in the country's economic system and tarnish the
\ngovernment's image abroad.<\/p>\n
\"Revoking the decree means that we (the nation) do not pay any
\nrespect to the law at all,\" he said, as quoted by Antara.<\/p>\n
\"In fact, legal certainty is one of the barometers used by the
\ninternational community to observe our economic system and
\npolicies,\" he added.<\/p>\n
Todung criticized Fuad for \"ignoring the procedures\" when he
\nissued the decree Friday.<\/p>\n
\"The minister should have consulted the House of
\nRepresentatives before he could declare it a decree,\" Lubis said
\nMonday.<\/p>\n
The planned income tax imposition was announced last Friday
\nand scheduled to go into effect Monday. It was intended to curb
\nfurther attacks on the rupiah.<\/p>\n
Fuad Bawazier, however, announced Monday that he had revoked
\nthe decree. He said the decision to cancel the 5 percent income
\ntax came after a series of negotiations between government
\nofficials and the International Monetary Fund (IMF) review team
\nover the weekend.<\/p>\n
Dimyati said legal certainty was one of the important elements
\nfor foreigners to determine whether or not they would invest
\nhere.<\/p>\n
\"Foreign investors would not like such a legal inconsistency,
\nparticularly so during the monetary crisis,\" he said.<\/p>\n
The law professor said inconsistencies in the legal sector
\nwould discourage the international community's commitment to
\nhelping Indonesia survive the economic woes.<\/p>\n
\"Such inconsistency shows that the government has no sense of
\ncrisis and sense of urgency at all,\" he said.<\/p>\n
\"International and national confidence in our economic and
\nlegal systems should have been thoroughly considered before
\nmaking any decision,\" he said.<\/p>\n
Asked whether the Indonesian government was put under strong
\npressure by the IMF to cancel the income tax plan, he said:
\n\"Wasn't he (the finance minister) a member of the negotiating
\nteam with the IMF?\". (imn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-criticized-for-revoking-foreign-exchange-tax-policy-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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