Five tax-related bills deliberated

JAKARTA (JP): House of Representatives members have demanded the bill on local taxes and fees not increase the burden of businesses and local administrations.

Legislator Setyadji Lawi from the Indonesian Democratic faction said yesterday the bill should eliminate unnecessary local taxes and levies to reduce business' high costs of businesses.

But he also said the bill should not reduce local administrations' revenues.

"We sense a pessimistic belief or even fear among local administrations that their revenues will decline (due to the introduction of the bill)," Setyadji said.

Yesterday, the government and the House started deliberating the bill and four other tax-related bills. They include the tax on the transfer of land and buildings, tax collection with distress warrants, tax courts and non-tax revenue bills.

Minister of Finance Mar'ie Muhammad said the introduction of the five bills was to increase revenues for both the central government and local administrations and to provide the business sector with legal certainty.

Legislator Hartini Mochtar Kasran said "suggestions and proposals from local administrations should be taken into consideration, especially on matters related to new taxes which are not yet accommodated in the bill and subject to further regulations".

Sharing Hartini's view Setyadji said the introduction of new taxes, especially those on gasoline, needed further deliberation because it would affect most people and industry.

Setyadji said his faction hoped the bill would help develop an institutionalized local tax collection system to prevent the emergence of illegal levies.

"We hope the system would prevent loopholes and minimize opportunities for collusions between tax collectors and tax payers," Setyadji said.

Both the Indonesian Democratic and Golkar factions wanted further deliberations over the five percent rate stipulated in the tax on the transfer of land and building bill.

Setyadji also said his faction wanted the bill to exempt cheap houses with maximum retail price of Rp 30 million (US$12,500) from the tax on the transfer of land and building.

Commenting on the tax court bill Hartini said the Golkar faction wanted the deliberating team to clarify the Supreme Court's position in the tax court system.

Under the tax court bill all tax court decisions are final. There is no appeal mechanism stipulated in the bill.

The tax court will replace the current Tax Arbitration Council which businesspeople saw as ineffective in settling tax disputes.

Both Hartini and Setyadji commended the government's initiative in presenting the non-tax revenue bill, which was expected to realign all government incomes raised from sources other than taxation.

Under the bill, all such incomes should be accounted for in the annual state budget. (rid)