Govt grants tax incentive to tsunami donors

Rendi A. Witular, The Jakarta Post/Jakarta

The government issued on Tuesday a ministerial decree to provide tax incentives for businesses that provide aid for the victims of the deadly earthquake and tidal waves in Aceh and North Sumatra.

Under the decree, companies that donate part of their profits to help the victims, will enjoy a tax cut, said Minister of Finance Jusuf Anwar.

"Monetary donations given by companies for the victims will not be calculated as taxable expenditure," said Jusuf.

According to Jusuf, in order to receive the facility, companies should have a legitimate receipt from the people or institutions that received the donations, and attach the receipt to their annual income tax bill.

Jusuf also said that in order to facilitate the collection of monetary aid from the business community and from foreign institutions and countries, the government had opened a special account in Bank Indonesia.

For donations in rupiah the account number is 510.000.272, for donations in dollars the account number is 602.074.411, for yen 602.075.111 and for euro 602.075.991.

The government needs assistance to help the earthquake and tsunami victims as the budget deficit is expected to soar to more than Rp 26.3 trillion (US$2.92 billion).

The deficit is expected to widen because according to Director General of Taxation Hadi Purnomo the tax revenue target for this year was Rp 6.5 trillion short as of Dec. 27. The government targeted a tax revenue of Rp 260 trillion this year, including income from excise and import and export duties.

Hadi also said that potential tax losses from the earthquake and tsunami were estimated at between Rp 300 billion and Rp 500 billion.

According to Coordinating Minister for the Economy Aburizal Bakrie the financial losses in the two provinces resulting from the disasters might reach more than Rp 5 trillion.

In the past, many people and agencies were reluctant to distribute aid to natural disaster' victims through the government for fear that the aid would be embezzled by corrupt officials.

International Transparency ranked Indonesia as the sixth most corrupt country in the world in its latest survey.

Dismissing such a worry, Jusuf said there was no need to form a special supervisory body because the current system functioned well.

"It is not necessary for us to form a special supervisory or audit team for the aid. The public should not have a negative perception about us."