Govt to penalize wealthy people who don't donate

SURAKARTA, Central Java (JP): The government plans to penalize the wealthy who fail to donate 2 percent of their net incomes to help the poor.

Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said here yesterday the finance minister was drafting a regulation on sanctions.

The regulation is expected to enforce Presidential Decree No. 92/1996 which requires individual and corporate tax payers with net annual incomes exceeding Rp 100 million (US$42,000) to pay 2 percent of their net incomes to support the government's poverty- alleviation program.

"We should not worry about how to enforce the decree. There must be sanctions. Just wait for the finance minister's decree," Subiakto said.

It is imperative the wealthy comply with the government's call to help the poor because more than 25 million people still lived below the official poverty line, Subiakto said.

Last December the government, also through a presidential decree, urged the wealthy to give 2 percent of their net incomes to help the poor. But this was not compulsory.

The new presidential decree has made the donations compulsory.

Eligible taxpayers must transfer their donations directly to the Dana Sejahtera Mandiri Foundation, headed by President Soeharto.

The President issued a similar decree in December last year, but in that decree the President "appealed" rather than "obliged" the wealthy to donate 2 percent of after-tax incomes.

Soeharto said here Sunday that he made the new decree because many businesspeople had ignored his appeal.

Critics say the new presidential decree lacks legal basis because no law stipulates that the rich must help the poor.

Soeharto acknowledged there was no law clearly requiring the rich to give to the poor. It was the state ideology Pancasila which inspired him to order the rich to help the poor.

Soeharto warned that rich people who failed to donate 2 percent of their net incomes would be morally chastised.

"Just mark their houses... with flags or whatever, they should be ashamed then," Soeharto said.

The government said earlier the funds would be used to help poor families who did not receive aid in its poverty-alleviation program for least-developed villages.

There are 26 million families living below the official poverty line: 11.5 million of them live outside least-developed villages.

The government has designed a poverty-alleviation program for these 11.5 million families. The program will be overseen by State Minister of Population Haryono Suyono.

Under Haryono's program, each of the poor families will borrow Rp 100,000 at 6 percent annual interest.

Minister Subiakto said the foundation had raised about Rp 400 billion from the 2 percent surcharge. (har/rid)