Govt turns down request for levies ruling exemption<\/p>\n
JAKARTA (JP): Minister of Finance Fuad Bawazier and Minister
\nof Home Affairs R. Hartono have turned down a request from East
\nNusa Tenggara Governor Herman Musakabe to exempt the province from
\nthe obligation to abolish most business levies in the province, a
\nlocal official said last week.<\/p>\n
Joachim Reo, the head of the provincial revenue agency,
\nannounced the rejection and said the province would lose more
\nthan 30 percent of its local revenue, including Rp 50 billion
\n(US$6 million) from the sandalwood and livestock sectors.<\/p>\n
\"Our revenue was never less than Rp 32 billion before the
\nban,\" Antara quoted Joachim as saying.<\/p>\n
Last month Hartono abolished 73 levies and taxes imposed by
\nprovincial, regency and city administrations throughout the
\ncountry. Their annual budgets are generated from central
\ngovernment funds and local levies and taxes.<\/p>\n
The minister also ordered all local administrations to
\nterminate all other levies and taxes not covered under the 1997
\nLaw on regional taxes and levies.<\/p>\n
The law, which came into effect on Jan. 1 requires the
\ngovernment to cut the number of local taxes from 42 categories to
\nnine and the number of levies from 192 to 30.<\/p>\n
Hartono's instruction itself will take effect on May 27.<\/p>\n
\"The instruction has become a headache for us,\" Joachim
\ncomplained.<\/p>\n
In his agreement with the International Monetary Fund in
\nJanuary, President Soeharto pledged to prohibit all local taxes
\nat all levels on goods to be exported.<\/p>\n
To strengthen the country's competitiveness and market
\nintegration, the government will also develop and implement a
\none-year program to abolish taxes on interprovincial and
\ninterdistrict trade.<\/p>\n
\"Any loss of local government revenue will be addressed
\nthrough a combination of local fuel taxes and transfers from the
\ncentral government,\" the agreement said.<\/p>\n
Local authorities have the right to impose 5 percent fuel
\ntaxes starting on April 1 and some property taxes. However, the
\ngovernment has not issued any final decision on this tax.<\/p>\n
The Jakarta city administration has complained that its
\nregional revenue would drop more than 15 percent, including in
\nparking fees and foreigner tax receipts.<\/p>\n
The North Sumatra administration had said that its regional
\nrevenue target for the 1998\/1999 fiscal year will decrease by at
\nleast Rp 18 billion from last year.<\/p>\n
East Timor officials have warned that many city and district
\nadministrations could no longer be able operate if they had to
\nrely on locally generated tax revenues and government subsidies.<\/p>\n
The regent of Cilacap in Central Java, however, remains
\noptimistic that he will be able to resolve the problems that may
\nensue if the regency loses at least Rp 90 million, mostly from
\nfish auction fees.<\/p>\n
\"Fuel taxes will be sufficient to compensate for the
\nshortages,\" Chaeroni, the spokesman for the regency which has an
\noil refinery, said. (45\/prb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-turns-down-request-for-levies-ruling-exemption-1447893297",
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"sponsor": "Okusi Associates",
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