Govt seeks more tax revenue from SOEs<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
State Minister of State Enterprises Laksamana Sukardi said the
\ngovernment was discussing ways of raking in more tax revenue from
\nstate-owned enterprises (SOEs).<\/p>\n
"More tax revenue should be tapped from the state
\nenterprises," he told a press conference following a meeting with
\nVice President Hamzah Haz on the subject.<\/p>\n
Laksamana said that the contribution of SOEs to the country's
\ntax receipts had been relatively low compared to that of the
\nprivate sector.<\/p>\n
By comparison, he went on, the state had been receiving much
\nmore tax revenues from private companies than from state-owned
\ncompanies operating in the same line of business.<\/p>\n
He argued that the tax paid by a private company was often
\nbetween three and five times greater than the tax paid by an SOE
\nin the same business.<\/p>\n
He said that tax receipts from SOEs only amounted to between
\nRp 15 trillion and Rp 16 trillion (US$ 1.6 billion) each year,
\nwith most of them coming from the banking sector, mainly in a
\nform of taxes on deposits.<\/p>\n
Laksamana said that the only way to boost the tax contribution
\nof SOEs was to step up efficiency, and eradicate corruption,
\ncollusion and nepotism.<\/p>\n
The low level of efficiency and flourishing corruption have
\nlong been regarded as the reason behind the poor performance of
\nthe SOEs.<\/p>\n
While the details remained sketchy, Laksamana confirmed that
\nsuch a goal was one of the main reasons why the government was
\nmoving ahead with its privatization program.<\/p>\n
Privatizing the SOEs would improve their efficiency and
\ntransparency, which would in turn boost their revenues, meaning
\nmore tax receipts for the state.<\/p>\n
The government is currently expected to sell off shares in 25
\nSOEs.<\/p>\n
Indonesia has some 150 SOEs, most of which are inefficient,
\nloss-making operations.<\/p>\n
Many observers have called the enterprises cash cows for
\npoliticians and corrupt bureaucrats. This was particularly the
\ncase during the rule of former president Soeharto.<\/p>\n
According to independent audits published late last year, five
\nlarge SOEs labored under a combined total of $4 billion worth in
\ninefficiencies, potential losses and lost reserves between 1995
\nand 1999.<\/p>\n
The government has been trying hard to boost tax revenues as
\nit has been running out of financing sources in its efforts to
\nhelp balance the budget.<\/p>\n
With huge expenditure pressurizing the annual budget, the
\ngovernment is desperately trying to scoop up as much as it can
\nget on the revenue side.<\/p>\n
For this year, the state budge has targeted a total of Rp
\n184.7 trillion (US$18 billion) in tax revenue.<\/p>\n
Laksamana also disclosed that preparations were underway to
\ndetermine the real outlay the government had incurred in the past
\nwhen it bailed out troubled SOEs.<\/p>\n
The government has often had to inject capital into SOEs
\nsuffering from mismanagement or project failure to prevent them
\nfrom going to the wall.<\/p>\n
"The government is going to take an inventory of the state
\nenterprises that received such capital injections," he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-seeks-more-tax-revenue-from-soes-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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