Aid for the poor
Aid for the poor
Most taxpayers who are eligible to pay compulsory donations to
help poor families have expressed full support for the objective
of President Soeharto's latest initiative to step up the poverty-
alleviation drive. They are undoubtedly aware of the urgency of
more equitable distribution of incomes because they fully realize
that national stability -- one of the basic prerequisites to
sustainable development -- can be maintained only if all members
of society share the fruits of economic development.
In fact, the national stability we have enjoyed over the past
30 years should be attributed to the emphasis placed on
agricultural and rural development right from the outset of the
first Five Year Development Plan in 1969.
The House of Representatives has always supported special
programs in the annual state budget which were designed
specifically to help poor families. Because there are always
groups of people unable to benefit directly from economic
development, special efforts are needed to help them share in
economic growth.
There have, however, been different views on how the funds to
help the poor should be raised, used and accounted for. No wonder
most of the reservations regarding President Soeharto's Decree
No. 92/1996 reflect great concern about transparency and
accountability for the funds to be collected.
Since the decree now makes it compulsory for corporate and
individual taxpayers, with after-tax incomes or profits exceeding
Rp 100 million (US$42,700) a year, to give 2 percent of their
after-tax incomes to help poor families, the nature of the fund-
raising campaign has changed. What is defined by the decree as
donations are seen by taxpayers simply as taxes which, by virtue
of the Constitution and tax laws, should be administered and
accounted for in the state budget.
We fully understand and support the President's great concern
-- which often reaches the point of obsession -- to abolish
poverty. He obviously has been disappointed by the lack of
response to his moral suasion, through a decree (No.90/1995) last
December, for individual and corporate taxpayers of top income
brackets to donate 2 percent of their net incomes or profits to
the poor.
We reckon that no eligible taxpayer has complained about the
extra burden imposed by the President's move. After all, the
country's highest income tax rate (30 percent) is lower than
those in many other nations. It is the manner in which the 2
percent donation has been imposed that is raising questions.
No taxpayer has questioned the credibility or goodwill of the
Yayasan Dana Sejahtera Mandiri foundation which was founded early
this year by President Soeharto (in his personal capacity) and
several business leaders to manage donations to the poverty-
alleviation program. Soeharto himself affirmed, during the
foundation's establishment, that all donations to the foundation
would be managed transparently and publicly accounted for. The
foundation's executives include personalities who are well known
for their great concern for the poor. They include tycoons such
as Soedono Salim, Sudwikatmono, Anthony Salim and several cabinet
ministers. Businessman Bambang Trihatmodjo, who is treasurer of
the ruling Golkar group, also acts as treasurer of the
foundation.
But now that the donations have become compulsory, we see some
benefit in the suggestion that the funds be managed and accounted
for in the state budget. This, we think, supports the House's
campaign to make the government improve its budgetary discipline
and facilitate the process of building institutional checks and
balances. Accountability under the state budget, which must be
approved by the House, would also avoid unnecessary questions
about the fund- raising campaign, especially in the run-up to the
general election in May.