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)