City's economic growth minus 2.74%
City's economic growth minus 2.74%
JAKARTA (JP): With a solution to the devastating economic
crisis still out of sight, the city government reported yesterday
that growth in Jakarta's economy had fallen to negative 2.74
percent.
Deputy Governor for Economic and Financial Affairs Harun Al
Rasyid said the economic turmoil had crippled business activities
and slashed tax revenues.
Revenue from taxes on vehicle sales and the entertainments
business, the city's largest sources of income, have dropped
sharply.
"Unlike other provinces, we don't have natural resources to
augment locally generated income. In times of crisis, vehicle and
entertainments revenues are badly affected.
"To cope with the crisis, the five mayoralties should do their
best to shore up tax revenues. They should not hesitate to
collect even small change to finance development," he said.
The city's locally generated revenues are expected to fall
15.86 percent to Rp 1.72 trillion (about US$215 million) in the
1998/1999 city budget, down from Rp 2.03 trillion.
The drop in revenue is also partially due to the enforcement
of Law No. 18/1997 on tax and regional levies, which stops the
city collecting a number of taxes and levies, including parking
fees and a tax on foreigners.
Under the law passed by the House of Representatives (DPR) in
April last year, the central government has cut categories for
local taxes from 42 to nine and categories for levies from 192 to
30.
Next financial year's budget has been prepared assuming zero
economic growth and 25 percent inflation in Jakarta.
Harun said that the zero percent growth was set "so that
business in the city can still operate", although it cannot
expand.
In fact, the city should not have a big problem financing
development, provided the budget was used optimally and leakages
controlled, Antara reported the official as having said.
He asked city officials to end corrupt practices so that the
city revenues could be used for the purposes they were intended
and not end up in officials' back pockets.
"I know that corrupt activities take place, but let us in this
time of crisis work hard for the administration," he said.
Subdistricts heads have also been asked to inform the city
administration of potential sources of income in their respective
areas.
Harun said that 10 percent of taxpayers had failed to pay
their dues this month.
Meanwhile, Bambang Sungkono, chief of the city's inspectorate
office, said that the administration would intensify supervision
of development projects to minimize corruption.
The supervision, he said, would focus on preventing collusion
between project managers and contractors.
"Contractors on city development projects often have to pay
illegal levies", he said. (ind)