Expatriate levy confuses officials

Damar Harsanto and Tony Hotland, Jakarta

With no guiding policy on the allocation of funds generated from a levy on foreign workers, officials from different institutions are releasing contradictory statements regarding the issue.

The Ministry of Finance's director general of budgetary affairs, Ahmad Rochjadi, said on Tuesday the levies were transferred directly to the ministry as state revenue.

The government levies companies US$100 monthly per foreign employee, as stipulated in Law No. 13/2003 on manpower.

"We have allocated 20 percent of the revenue as a general fund for the regions, which later is distributed to all local administrations," he told The Jakarta Post.

He said this would make it difficult to trace whether the money came from the foreign worker levy or from other sources of state revenue.

Ahmad said the local administrations received different amounts of money from the general fund, based on calculations by the ministry. He did not go into detail on the calculations.

The Jakarta administration received Rp 11 billion ($1.25 million) from the fund this year, more than double last year's Rp 5 billion.

Jakarta Manpower Agency head Ali Zubeir insisted the money came from the levy on foreign workers. "I am very sure of that, but I don't know the basis of the calculations used to determine how much we receive."

Ali did agree with Ahmad that the levies were submitted directly to the finance ministry.

The Jakarta administration demanded on Monday that it receive 60 percent of the revenue from the levy to help finance four training centers in the city, as well as several government programs. The administration argued that it was receiving too small a percentage of the total revenue.

"Some 62 percent of the fund goes to develop human resources, while the rest goes toward education programs as well as health programs," Ali said.

Data from the manpower agency shows that about 7,000 foreign workers are registered in Jakarta. The agency hopes to secure at least Rp 45 billion of the Rp 72 billion in annual levies collected on foreign workers.

In response to the request, Ahmad said the distribution of the general fund from the central government was regulated in Law No. 25/1999 on fiscal balance.

The law is in the process of being amended by the House of Representatives.

"The Jakarta administration should have submitted the proposal to the House because they have the authority (to enact or amend laws)," Ahmad said.