A compulsory contribution

A compulsory contribution

There will no longer be any doubts as to the obligation of big
taxpayers to set aside 2 percent of their incomes to help poor
families. This contribution, which major taxpayers have so far
been asked to make on a purely voluntary basis, has now been made
compulsory.

The government is now requiring corporate and individual
taxpayers with annual net incomes of Rp 100 million or more to
donate 2 percent of their after-tax profits for the above-
mentioned purpose.

From the point of view of intent (helping the poor), this
shift from a voluntary to a compulsory basis deserves to be
supported. What is regrettable is that the formal obligation to
pay such as compulsory levy is based on a mere government
regulation. We believe it should be contained properly in a law,
because non-payment of the contribution is now punishable. For
businessmen, the upsetting thing may be that the new regulation
is valid as of fiscal year 1996.

The amount of money that will be collected through this new
regulation is estimated to be quite considerable. Some believe it
to be no less than Rp 250 billion a year. If this is true, the
regulation will certainly be most meaningful to the efforts to
eliminate poverty.

We very much hope that proper transparence will be observed in
the management of the fund, in the reporting system that is
applied and in the allocation of responsibilities.

-- Bisnis Indonesia, Jakarta