Soeharto to unveil draft budget<\/p>\n
JAKARTA (JP): President Soeharto is scheduled today to
\nunveil the government's budget plan for 1995-1996, which will
\nlikely rely more on revenues from private sector activities and
\noffer a salary increase for civil servants and Armed Forces
\nmembers.<\/p>\n
The President will deliver the budget plan in a speech at a
\nplenary session of the House of Representatives (DPR), which is
\nexpected to pass it into law without substantial changes after
\ntwo months of deliberation.<\/p>\n
Twenty ministers briefed editors of domestic and foreign
\nmedia on the state budget plan at the Ministry of Information's
\noffice here last night. All of their statements were embargoed
\nfor publication until the President delivers his address at the
\nHouse session.<\/p>\n
House members are predicting that the government will likely
\nraise its 1995-1996 budget, to be implemented in April, by only
\n12 percent from this fiscal year's level of Rp 69.75 trillion
\n(US$31.7 billion). They base this reasoning on the fact that the
\nrevenues to fund any increase can be expected only from non-oil
\ntaxes -- which are estimated to reach Rp 40 trillion in 1994-
\n1995.<\/p>\n
The government will not be able to expect a substantial
\nincrease in revenues from oil and gas because Indonesia's oil
\nproduction will be limited by a ceiling set by the Organization
\nof Petroleum Exporting Countries (OPEC), which has decided to
\nextend its production quota for one year beginning this month.
\nOil prices are projected to stagnate at the present level of
\nabout $16 a barrel.<\/p>\n
This fiscal year's revenues from oil and gas are estimated
\nat Rp 12.85 trillion, already down by 15 percent from last fiscal
\nyear.<\/p>\n
The government is also expected not to raise its revenues
\nfrom foreign aid substantially from this fiscal year's level of
\nRp 10 trillion because it remains committed to reducing
\ndependence on offshore borrowing.<\/p>\n
\"The only sector that the government can expect much from is
\nnon-oil taxes,\" a DPR member said.<\/p>\n
Minister of Finance Mar'ie Muhammad said recently that the
\nlowering of income tax rates and the expansion of bases for tax
\ncollection are expected to improve the compliance of taxpayers.
\nThe lowering of the tax rates also is expected to help increase
\nthe profitability of companies, which in turn will increase their
\ntax payments.<\/p>\n
On the spending side, the 1995-1996 budget is likely to
\noffer an increase of salaries for civil servants and members of
\nthe Armed Forces because without any increase, the lowest level
\nof the salaries will be far lower than the government-set minimum
\nlevels of wages that should be paid by private sector employers.<\/p>\n
The government announced Tuesday that private sector
\nemployers should increase their minimum wage levels by a range of
\nbetween 11 percent and 35 percent beginning in April.(riz)<\/p>",
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