Highlights of the IMF economic reform package<\/p>\n
JAKARTA (JP): These are some of the main points in the
\nmemorandum attached to the letter of intent from President
\nSoeharto to the International Monetary Fund.<\/p>\n
* Gradual elimination of fuel and electricity subsidies,
\nstarting on April 1.<\/p>\n
* Increases in excises on alcohol and tobacco on July 1.<\/p>\n
* Remove VAT exemptions on goods such as electricity for
\nprivate companies, taxis, soybean feed for cattle, sugar,
\npersonal goods, medical equipment and other machinery and capital
\nequipment.<\/p>\n
* Impose a 5 percent local sales tax on gasoline starting
\nApril 1.<\/p>\n
* Expand range of goods subject to luxury sales taxes.<\/p>\n
* Raise the annual tax audit coverage. Develop improved VAT
\naudit programs. Increase recovery of tax arrears.<\/p>\n
* Incorporate Investment Fund and Reforestation Fund into the
\ncentral government budget.<\/p>\n
* Discontinue any special taxes, customs or credit privileges
\nto the National Car. Discontinue any budgetary and extra-
\nbudgetary support and credit privileges to IPTN projects.<\/p>\n
* Limit growth of broad money to 16 percent in 1998.<\/p>\n
* Amend Banking Law to allow full privatization of state
\nbanks.<\/p>\n
* Tighter supervision of commercial banks.<\/p>\n
* Lift restrictions on branching of foreign banks by February.<\/p>\n
* Cut import tariff on food items to a maximum 5 percent.<\/p>\n
* Abolish local content rules on dairy products from Feb. 1.<\/p>\n
* Cut tariff rates on non-food agricultural products by 5
\npercentage points.<\/p>\n
* Abolish import restrictions on all new and used ships.<\/p>\n
* Phase out export taxes, beginning with leather, cork, ore
\nand waste aluminum products on Feb. 1. Replace some export taxes
\nwith rent taxes to discourage overexploitation of natural
\nresources.<\/p>\n
* Eliminate all types of export restrictions, such as quotas,
\nwithin three years, unless for health or security reasons.<\/p>\n
* Lift export ban on palm oil after March; set export taxes on
\npalm oil at rates not exceeding 20 percent.<\/p>\n
* Remove restrictions on foreign investment in palm oil
\nplantations on Feb. 1, and on wholesale and retail trade by
\nMarch.<\/p>\n
* Dissolve all formal and informal restrictive marketing
\narrangements for cement, paper and plywood as of Feb. 1.
\nEliminate internal and external trade restrictions on cement.<\/p>\n
* Allow traders to buy, sell and transfer farm products --
\nincluding cloves, cashew nuts, oranges and vanilla -- across
\ndistrict and provincial boundaries.<\/p>\n
* Abolish all retribusi (local taxes) at all levels on export
\ngoods.<\/p>\n
* Limit Bulog's monopoly to rice. Permit flour millers to sell
\nor distribute flour to any agent from Feb. 1. Allow all traders
\nto import sugar and sell it domestically. Release farmers from
\nformal and informal requirements to plant sugarcane.<\/p>\n
* List 12 state enterprises in the first year, selling
\ncontrolling or even complete stakes to the private sector. Sell
\nmore shares of state companies already listed.<\/p>\n
* Set clear profit and performance targets on all remaining
\nstate companies, eventually closing nonviable enterprises.
\n(emb\/prb)b<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/highlights-of-the-imf-economic-reform-package-1447893297",
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"sponsor": "Okusi Associates",
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