Budget bill to streamline accounts

JAKARTA (JP): A bill presented at the House of Representatives yesterday stipulates that the government's non-tax revenues must now be accounted for in the annual state budget.

Minister of Finance Mar'ie Muhammad, who presented the bill, said the draft legislation covers all of the government's income from sources other than taxes such as licensing, user fees, royalties, rents from state assets and investment income from state assets.

"All government institutions will be obliged to transfer any non-tax revenues they collect to the state treasury as an effort to improve budgetary discipline," Mar'ie noted.

All revenues will be accounted for in the state budget, he said.

"If government officials fail to fulfill their obligations to collect and transfer non-tax revenues, they will be penalized according to the regulations," Mar'ie told a plenary House session.

Non-tax revenues collected by government agencies currently do not go into the government's account at the Ministry of Finance, but to government departments or institutions.

House members and analysts, including those from the Center for Fiscal and Monetary Studies, have suggested that the government account for its revenues and expenditures in the state budget, a move which must be approved by the House.

House members and analysts recently criticized the transfer of funds collected from foreign coal-mining contractors, which went from the state-owned company PT Batubara Bukit Asam to the minister of mines and energy's account.

The government has projected that non-tax receipts will rise 12 percent to Rp 8.2 trillion (US$3.4 billion) in the next fiscal year, beginning in April, from Rp 7.26 trillion in the current budget.

Non-tax revenues for the next fiscal year include Rp 1.9 trillion in dividends from state enterprises, Rp 513 billion from education (including Rp 60.68 billion in tuition fees), Rp 140 billion from forestry and mandatory fishing royalties and Rp 164.5 billion from licensing services.

Non-tax revenue, by state budget definition, also includes profits from domestic oil fuel sales.

Most non-tax revenues are governed by regulations. Some are even regulated by laws in the areas of forestry, mines and Indonesia's exclusive economic zone.

The new bill includes provisions for non-tax revenue, stipulated in existing laws, and potential future revenues, Mar'ie said.

Although all government departments and institutions are required to transfer their revenues to the government's coffers, they are allowed to allocate some funds for public services and development purposes such as environmental conservation, research and technology, education and training, health services and law enforcement.

"This policy is one of our efforts to improve the management of our natural resources, government services, human resources and encourage research and technology development," Mar'ie said.

But the bill does not fix the rates of royalties, licensing fees and other levies. It lets the government -- the various institutions and ministries -- decide these rates.

"But the decision on rates must be taken carefully so that they do not burden the people or inhibit businesses," Mar'ie said.

Many parties have blamed levies, both legal and illegal, for creating a high cost economy, which has been eroding export competitiveness.

To encourage fairness, Mar'ie said, the bill contained the possibility of self-assessment in determining the amount of levies that companies or individuals must pay. The levies paid under the self-assessment system will still be subject to government verification.

If it is found that a company has paid less than its required levy, it will have to pay the shortfall plus an interest rate of 2 percent a month within a maximum of two years.

If the amount the company pays is more than the actual amount due, the excess will be deducted from company's levy payment for the following year. If no levy payment is due that year, the excess will be returned to the company.

The bill states that those failing to pay levies will face a maximum prison sentence of six years and a fine worth four times the amount of the levy due.

Ministries or state institutions can ask the Development Finance Comptroller to investigate individuals or companies suspected of manipulating the levies they pay or those they evade paying. (rid)