Budget bill to streamline accounts

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)