Income tax hike suggested to fund health services

JAKARTA (JP): Minister of Health Achmad Sujudi suggested on Thursday that income tax be raised by 3 percent to fund the community health services network (JKPM), which is expected to begin operating in six years time.

"By increasing the tax by 3 percent we can raise extra funds which can be used as capital for the program," Achmad said at a media conference.

Achmad estimated that some Rp 12 trillion (approximately US$1.8 billion) could be collected annually as a result of the income tax increase.

He argued that the income tax hike from 15 percent to 18 percent would be a equitable way to collect funds for a program aimed at benefiting the public.

It was clear that Sujudi was testing the waters when he raised the idea with the media. He acknowledged that the increase was likely to meet with public resistance.

"I invite the public to debate the idea," he said. He noted that if opinions and alternatives were aired the ministry could consider the best way to apply the program.

The JKPM is a national social program designed to provide people with full access to health services. It is a revamped version of a social health insurance program.

Achmad said the public program would be the foundation of the country's future health services.

Government health insurance programs currently include the Employees' Social Insurance and the state health insurance program for state employees.

JKPM is a similar program but would apply to all Indonesians.

Achmad said that if the tax hike was accepted then a new law could be issued by the end of next year to endorse the move.

He said the JKPM could begin operating by 2005.

The minister pledged that the funds would be managed in a transparent way.

He said the country had adequate health services, but that most people were unable to pay for them. He claimed that if people saved their money for treatment fees, the situation would be resolved.

At the same briefing, the Director General of Medicine and Food Control Sampurno said the ministry would supply essential medicines worth Rp 408 billion to community health centers across the country.

The supply boost is meant to decrease the treatment fee by 30 percent and is scheduled to take place in the next three months. The country has stocks of essential medicine to cover the period up to March 2000, and ongoing production of pharmaceutical supplies is expected to further boost supplies. (04)