Illegal fees, common enemy

Illegal fees, common enemy

Most dailies in Jakarta on Sunday (June 26) published the
staggering findings by the University of Indonesia's research
institute in cooperation with the Dutch government and the World
Bank. It was found out that illegal fees within the ministry of
finance's department of customs and excise during the 2004 period
amounted to about Rp 7 trillion (US$718 million) from
importers/exporters in Jakarta, Semarang, Surabaya, Medan and
Makassar.

The amount means Rp 583 billion per month, or Rp 19.4 billion
per day that. If this fell into the hands of 20 persons, they
would receive -- every day -- almost one billion each. They
would, consequently, become very rich persons in a matter of
weeks or months.

These practices occur because of the time duration needed for
an export/import permit is seven days in Tanjung Priok port
compared to three days in Japan, two days in Germany and the
United States, and one day in Singapore. Such a long process has
no doubt provided corrupt officials ample time to impose illegal
fees, as they can detain goods unless they are paid these illicit
fees. It proves that the oversight function of the ministry is
nonexistent.

Presidential Instruction No. 5/2004 regarding the speeding up
of corruption eradication does address in Dictum eleven point 2
that the minister of finance undertakes supervision on the
implementation of taxation, customs and excise, and non-budgetary
and taxation revenues in an effort to prevent leakage of state
revenues, and to study the various regulations related to state
finance that may open opportunities for corrupt practices and
altogether draft the revision of the related bills.

In view of the above instruction, there is a need for the
minister of finance to undertake an effective supervision of its
directorates general of customs and excise and tax whose role in
ensuring the country's economic growth is critically important.
As regard investment procedures, the country is still the worst
in providing such permits. An investor needs (on average) 151
days or around five months to get a permit compared to Vietnam
56, the Philippines 50, China 41, Thailand 33, Malaysia 30,
Singapore eight, and Australia two days. Therefore, in order to
improve Indonesia's standing in investment ratings, there should
be a radical change in the way that such permits are processed.
The government bill on investment that promises a processing time
for an investment permit of only two weeks -- as stated by the
new Investment Coordinating Board chief Muhammad Luthfi -- must
be responded to by members of the House of Representatives
(Republika, June 26).

M. RUSDI, Jakarta