Business welcomes poor fund

Business welcomes poor fund

JAKARTA (JP): The presidential decree calling for major
taxpayers to donate 2 percent of their earnings for poverty
eradication has won a warm welcome from business people.

Mochtar Riady, chief commissioner of Lippo Group, told
reporters yesterday that poverty eradication and the need to
narrow the people's social-economic gap was now very urgent.

"In fact, these issues must be the concern of every person,"
he said after the signing of a memorandum of understanding
between PT Multipolar Corporation, a subsidiary of the Lippo
Group, and state-owned PT Indosat yesterday.

The memorandum will allow Indosat to provide and develop a
variety of international telecommunications services in the Lippo
property complex in Karawaci, West Java, and in other areas
developed by the group.

Mochtar, although claiming he had yet to study the details of
the regulation, agreed that business people should give a
positive response to the government's call.

"But I will just follow the rules and do as everyone will
do... I am not the leader here," he said. He also refused to
comment further on the management of the funds, which reportedly
would be carried out by a foundation.

The government, through Presidential Decree No. 90/1995, calls
on individuals and businesses -- including foreign and listed
firms -- that earn after-tax profits of more than Rp 100 million
(US$43,000), to donate up to 2 percent of their profits to a new
fund for the poor.

The government is expected to raise at least Rp 250 billion a
year in poverty-eradication funds from the new source.

Statistics estimate 25 million of Indonesia's 195 million
people currently live in poverty, based on the minimum daily
calorie intake of 2,100, and a certain quantity of non-food
consumer goods and services.

Discussion

Chairman of the Indonesian Chamber of Commerce and Industry
(Kadin) Aburizal Bakrie, said Kadin members would discuss the
ruling and possibilities of their contribution to poverty
alleviation in the chamber's national workshop later this month.

He said Kadin will propose that the government be included as
a member of the body which, in the future, will manage and
control the utilization of the funds.

Aburizal said the management of the body should be transparent
and its members should consist of government officials as well as
representatives from the private sector who donate their funds.

Businessman Sofyan Wanandi, from the Gemala Group, was quoted
by the Kompas daily yesterday as saying that many of his
colleagues were not yet aware of the new regulation.

The idea of setting aside a percentage of the profits of major
businesses was first voiced out by businessman Eka Tjipta Widjaja
during a meeting of business tycoons in Jimbaran, Bali, last
August.

The meeting concluded with the "Jimbaran Declaration" which
called on large businesses to help the government with its
poverty eradication program.

Sofyan said the people who attended the meeting -- known as
the "Jimbaran Group" -- had actually intended the donations to
come from individual taxpayers who earned more than Rp 100
million a year.

The recent decree, however, stipulates that those subject to
the ruling will not only be individuals but all taxpayers,
including foreign and listed corporations.

"But we will go along with the regulation anyway. After all,
it is a presidential decree," he said.

He was convinced that with such a ruling, the government would
be able to collect up to Rp 900 billion a year.

Meanwhile, members of the House of Representatives emphasized
the need to include the contributions in the state budget so its
spending could be controlled by the legislative body and be open
for scrutiny by the supervisory state bodies such as the Supreme
Audit Agency.

They also considered that the legal grounds for the regulation
should be reinforced into a law.

Similarly, business consultant Laksamana Sukardi pointed out
that the implementation of the rulings should be made accountable
to the public.

Without such management transparency, he said, the scheme
would only create more problems and irregularities. (kod/pwn)