Support grows but questions remain on wealth tax decree<\/p>\n
JAKARTA (JP): Businesspeople, legislators and analysts have
\ncome out in support of President Soeharto's decree that rich
\npeople pay 2 percent of their after-tax incomes to help the poor,
\nbut wonder how the government will implement it.<\/p>\n
Iman Taufik, a businessman and executive at the Indonesian
\nChamber of Commerce and Industry, said all businesspeople should
\nsupport the government's poverty-alleviation programs because it
\nwas their obligation to help poor brothers.<\/p>\n
"All members of the chamber will support it because poor and
\nvery poor families need our help. If not us, who else," Iman
\nsaid.<\/p>\n
More than 25 million people live below the official poverty
\nline.<\/p>\n
Directorate General of Taxes issued a letter yesterday to
\nexplain the decree. The letter states that individuals and
\ncompanies with net annual earnings over Rp 100 million must
\ndonate 2 percent of their net incomes. The order is effective for
\nthis fiscal year.<\/p>\n
He said eligible taxpayers must transfer their donations
\ndirectly to Yayasan Dana Sejahtera Mandiri foundation's account
\nat the Harmoni, Jakarta, branch of state-owned Bank Negara
\nIndonesia 1946. The account number is 0850801.001.<\/p>\n
Taxpayers will be required to submit a copy of transfer
\ndocuments to their nearest tax office.<\/p>\n
Arifin Panigoro, the chairman of publicly listed oil firm PT
\nMedco Energy, welcomed the move, saying it would help the
\ngovernment alleviate poverty.<\/p>\n
"It's good: 2 percent is very small. Just consider it as more
\nincome tax," Arifin said.<\/p>\n
Arifin believed the 2 percent surcharge would not discourage
\nforeign investors, saying other countries imposed income taxes up
\nto 60 percent.<\/p>\n
State Minister of National Development Planning Ginandjar
\nKartasasmita agreed the surcharge would not affect business.<\/p>\n
"I believe it. As long as you manage it transparently, it
\nwould be no problem for business," Ginandjar said.<\/p>\n
President Soeharto, in a similar decree issued in December
\nlast year, asked rich people to donate 2 percent of their after-
\ntax income to help the poor.<\/p>\n
Soeharto asked the country's wealthy in September this year
\nwhy only half of those qualifying for donations had ignored his
\nappeal.<\/p>\n
The government has pursued several poverty-alleviation
\nprograms, including loans to poor families. State Minister of
\nPopulation Haryono Suyono oversees this program.<\/p>\n
Haryono said recently Rp 1.15 trillion was needed for his
\nprogram which would loan each poor family Rp 100,000 at 6 percent
\nannual interest.<\/p>\n
The government said 15 million poor families qualified for the
\nloans.<\/p>\n
Unlike government aid to poor villages which is recorded in
\nthe state budget, these loans are not.<\/p>\n
Legislator Hamzah Haz of the United Development Party said the
\nsurcharge funds should be included as state revenue in the
\nbudget. Only then should the foundation distribute it.<\/p>\n
"This way, the foundation could be considered a tool for
\ndisseminating the funds to the poor," Hamzah said.<\/p>\n
Aberson M. Sihaloho of the Indonesian Democratic Party said
\nthe government should increase the top income tax rate of 30
\npercent to 32 percent rather than introduce this ruling.<\/p>\n
"If it is imperative the funds go to the state as taxes
\ninstead of to the foundation," Aberson said.<\/p>\n
Economist Didik J. Rachbini agreed the government should
\nmanage public funds transparently: "This means the manager of the
\nfunds must be accountable to the public."<\/p>\n
While it was not immediately clear how the new decree would be
\nenforced, economist Christianto Wibisono said he expected most
\nlocal taxpayers would comply voluntarily.<\/p>\n
"Most locals will comply, only the multinationals will argue.
\nPeople say it is better not to argue with the government because
\nyou would be considered opposition. This has become a political
\nissue and you would be considered disloyal," he said. (rid\/pwn)<\/p>",
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"sponsor": "Okusi Associates",
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