Bigger budgets allocated to improve public services

Damar Harsanto, The Jakarta Post/Jakarta

Taxpayers should expect better service from public officials when gathering taxes and levies as their departments' operational budgets are set to increase.

The move, in the form of a draft bylaw on tax revenue allocation approved by the City Council on Friday, would improve efficiency and stop the imposition of illegal tariffs by unscrupulous officials, councillors said.

Starting in 2005, operational budgets for revenue gathering agencies would increase to about Rp 200 billion (US$21.74 million) from last year's Rp 6.69 billion.

The extra funds would set operational costs at about 5 percent of total tax revenue. Last year's operational costs made up only 0.16 percent of the Rp 4.15 trillion in revenue gathered.

The draft was approved by all factions of the City Council.

"This big increase will encourage officials to improve their performance. Their improved performance will in turn increase tax revenues, which, in the end will also increase the officials' operational budgets," councillor Setia Budi of the Indonesian Democratic Party of Struggle said.

Councillor Saman Husni of the Crescent Star Party faction said the bigger budgets would minimize the levying of illegal fees by unscrupulous officials.

"With such a significant incentive, there should be no more illegal fees... (However) the City Audit Agency must provide tighter supervision of institutions involved in the imposition of taxes and levies," he said.

The draft bylaw stipulates that 70 percent of the revenue from vehicle taxes and transfer of vehicle ownership levies would be split among the city revenue and transportation agencies and state insurance company PT Jasa Raharja. The remaining 30 percent will go to other supporting institutions, including the city police and the central government.

The draft allocates 80 percent of revenue from fuel taxes for motorized vehicles to state oil and gas firm Pertamina and the revenue agency. The remaining 20 percent will go into central government coffers.

Ninety four percent of revenue gathered for the provision of street lighting will go to state electricity company PT PLN, while the other 6 percent will go to the government.

Other taxes, including those on groundwater, advertising, and on the operation of hotels, restaurants and entertainment centers, are to be further regularized in other gubernatorial decrees.