Hadi Poernomo new director general of taxation

Hadi Poernomo new director general of taxation

JAKARTA (JP): Hadi Poernomo was installed on Monday as the new
director general of taxation, replacing Machfud Sidik, who was
appointed director general of fiscal decentralization, a new post
at the finance ministry.

Minister of Finance Prijadi Praptosuhardjo said the reshuffle
was part of an overall restructuring as the finance ministry
anticipated tough fiscal challenges ahead.

"The challenges ahead require the finance ministry to
restructure its organization," Prijadi said in a speech during
the inauguration ceremony.

Hadi, who was previously the director of tax inspection, had
long been expected to replace Machfud, who assumed the post of
director general of taxation last year.

Prijadi said the tax office must work hard to increase the
country's relatively low tax revenue, but the effort should not
stifle the business sector or the economy in general.

He added that the tax office also must boost its performance
and credibility, and improve its administrative services in order
to gain the public's confidence.

The tax office raised some Rp 97.2 trillion (US$10 billion) in
tax revenue in the nine-month 2000 fiscal year, slightly more
than the government's target of Rp 94 trillion.

The tax revenue target for the 12-month 2001 fiscal year is
about Rp 180 trillion, compared to the total state budget of Rp
315.76 trillion.

Machfud has been roundly criticized by businesspeople over the
recent introduction of various new tax rulings aimed at boosting
tax revenue, including increasing the income tax on the interest
of bank deposits to 20 percent from 15 percent.

Prijadi said Machfud's new position was an "important post".
He said Machfud must design new rulings to implement the
government's new fiscal decentralization policy, including
intergovernmental fiscal relations.

The new fiscal decentralization policy is part of the autonomy
law that came into effect earlier this year, giving provincial
and regency administrations the power to manage their own
economic and social affairs.

The government is under pressure from the International
Monetary Fund to prevent regional administrations from going on a
borrowing spree to help finance their budgets.

It is feared that borrowing by the regions could pose a risk
to the country's overall economy if regional administrations
default on their loans.

The government has issued a circular banning provinces and
regencies from taking out both domestic and overseas loans for at
least the remainder of this year.

Prijadi also announced a number of new appointments to fill
other key posts at the finance ministry, including three new top
officials at the Capital Market Supervisory Agency, or Bapepam.

The three new officials at the agency are Mohammad Noor
Rahman, who will head the financial inspection bureau for
publicly listed financial services-related companies; Indarto,
who will lead the financial inspection bureau for publicly listed
nonfinancial companies; and Anis Baridwan, who will head the
accountancy and transparency bureau.

Prijadi also raised the status of the agency for state
auctions and claims to that of a directorate general, and
appointed Karsono Surjowibowo as its director general.

But the finance minister cut the authority of the fiscal and
monetary policy body, which is now the fiscal policy body. This
move was made because Bank Indonesia, as the country's
independent central bank, controls monetary policy.

Prijadi, however, said he expected the fiscal policy body to
cooperate closely with Bank Indonesia to achieve monetary
stability. (rei)