Jamsostek asks to be exempt from paying tax

Jamsostek asks to be exempt from paying tax

JAKARTA (JP): PT Jamsostek, a state-owned company running the
social security insurance program for workers, proposed to the
government that it should be exempt from its obligation to pay
tax and dividends.

"The company's real shareholders are workers, because its
assets come from premiums collected from workers and the social
security program is aimed at helping the government provide
social security for workers," the company president Ackmal Husin
said Wednesday.

Jamsostek data shows it has paid the government around Rp 180
billion in dividends and around Rp 120 billion in tax since 1993.

The government is planning to end its monopoly on social
security schemes following the alleged abuse of trillions of
rupiah under the former administration.

Jamsostek is now facing likely competition from private
companies ready to manage at least part of the premiums of 14.5
million employees working in 16,000 firms, from which Rp 6.7
trillion has been collected. Under the labor law all companies
employing at least 10 workers, or paying at least Rp 1 million in
monthly salaries, are obliged to join the scheme.

The Kontan business weekly reported earlier this month that PT
Lippo Insurance of the large Lippo group was among private
parties who had expressed interest.

Ackmal added that as of Jan. 1 1999 the company, which manages
insurance for occupational accidents, death, medical care
programs and pension schemes, would increase the interest rate of
pension funds from the current 10 percent to 17 percent. The
death provision would be increased from the current Rp 2 million
to Rp 3 million.

Regarding the suspected cases of corruption, Ackmal said the
management has asked the Attorney General's Office and the court
to handle the cases. "The cases are expected to be thoroughly
handled within three months," he said.

Harris Albert Tampubolon, who was chairing a steering
committee of the firm's annual meeting to evaluate its
performance, said that the meeting has decided to call the
company's former presidents to help solve the cases in court.

He cited that the president for the 1988/1993 period, should
be responsible for alleged abuse of Jamsostek funds in the
purchasing of several plots of land in Jakarta and Bogor, West
Java.

The president for the 1993/1998 period, he added, should be
held responsible for the alleged corruption and collusion in the
Jamsostek Tower construction project in Jakarta and the use of Rp
7.1 million to finance the discussing of the 1997 labor law,
which was being revised.

Despite such reported abuses, labor unions and the Association
of Indonesian Employers (Apindo) have said the government should
maintain the monopoly over workers' social security. (rms)