Government to abolish levy for Soeharto's foundation

JAKARTA (JP): President B.J. Habibie will soon issue a presidential decree to abolish the 2 percent levy imposed on individual and corporate taxpayers to finance former president Soeharto's poverty-alleviation program, Minister of Finance Bambang Subianto announced yesterday

He also said that Habibie would revoke a 1988 presidential decree which required producers of cigarettes, alcoholic beverages and other products subject to excise stamps to pay an additional Rp 1 for each stamp they purchased from the Directorate General of Customs and Excise. This levy was allocated to fund the scouting movement.

Speaking to reporters after an economic cabinet meeting, Bambang said the planned revocations were aimed at improving the state's financial discipline and providing certainty to the business community.

"Those rulings are not consistent with budget discipline because they are not aligned with the budget. On the other hand, they create confusion among investors in calculating their taxes."

Presidential Decree No.90/1995, later superseded by Presidential Decree No. 92/1996, requires individuals and companies with annual after-tax incomes or profits of more than Rp 100 million (about US$9,000 at current exchange rates) to donate up to 2 percent of their earnings to the privately run Dana Sejahtera Mandiri Foundation to fund poverty-alleviation schemes.

Soeharto established the foundation in January 1996 and remains its chairman.

Soeharto's close associate Sudono Salim, also known as Liem Sioe Liong, who chairs the giant Salim Group, cousin Sudwikatmono, son Bambang Trihatmodjo and Sudono's son Anthony Salim were also involved in the foundation's operation.

Coordinating Minister for People's Welfare/Poverty Eradication Haryono Suyono said Tuesday that Soeharto's chairmanship of the foundation could be reviewed.

Haryono also reported that the foundation had collected a total of Rp 1.5 trillion (about US$135 million at current rate) from taxpayers and channeled about Rp 1 trillion to poor families across the country, especially in Java.

He hoped the affluent would continue to voluntarily make donations to the foundation.

Bambang said the poverty-alleviation program would continue through funding from the state budget.

"Of course, we must consider the state financial situation so that all immediate needs for funds can be met proportionally," he said. (prb/rid)