Levies rampant in provinces

Levies rampant in provinces

JAKARTA (JP): If you want to do business in East Java, be
prepared to pay 22 different levies. If you plan to enter the
lucrative forestry industry, it is 32 levies and in the sugar
industry the number is 14.

These are just the official levies. On top of that you still
have to pay various unofficial levies.

These were just a few of the startling revelations made during
a meeting between business leaders and seven cabinet members
yesterday as the two sides discussed ways of phasing out
unnecessary levies and make the country's business community more
globally competitive.

Yesterday's was the second round of talks organized jointly by
Minister of Manpower Abdul Latief and the Indonesian Chamber of
Commerce and Industry (Kadin) over the past month.

With pressure mounting for Indonesian manufacturers to compete
with foreign producers at home and abroad, the business community
has been pressing the government to start dismantling many of the
official, as well as unofficial, levies that have burdened them
for many years.

Present at the meeting were representatives from Kadin's 23
provincial chapters and 70 business associations. Nine people
raised some of their complaints in the two-hour meeting at
Latief's office.

The government was represented by Coordinating Minister for
Production and Distribution Hartarto, State Minister of National
Development Planning Ginandjar Kartasasmita, Minister of Industry
and Trade Tunky Ariwibowo, Minister of Tourism, Post and
Telecommunications Joop Ave, Minister of Transportation Haryanto
Dhanutirto, Minister of Agriculture Sjarifudin Baharsjah and
Latief. Kadin Chairman Aburizal Bakrie and his Advisory Board
chief A. Baramuli were also present.

Latief, a former businessman, has led the campaign to phase
out as many levies as possible.

His interest however goes beyond just helping old friends. He
has argued that the huge "invisible" costs that companies have
been paying come at the expense of depressing wages of their
workers, a complaint he repeatedly heard every time he raised the
minimum wage levels since 1993.

Muchayat, chairman of Kadin East Java, said anyone intending
to do business in his province must be prepared to pay 22
different kinds of levies.

A manufacturing company, he said, must fork up to Rp 50
million just to draw up an environmental impact analysis report.

Some of the worst levies are found in Tanjungperak port, such
as paying to use a crane to lift goods, to use containers, the
60% premium for electricity use, and parking charges and getting
goods in and out of the port.

"How can we compete with foreign producers if we are faced
with such problems in the distribution. The problem is generally
found in every port," Muchayat said.

He said there are also levies charged by the Agrarian Affairs
Office in East Java for manufacturers in setting up their plants,
the size of which varies according to the size of land they
occupy.

Sukardi, a representative of the Association of Forestry
Concession Holders, counted no less than 32 official and
unofficial levies in the forestry sector, imposed on virtually
every stage of the process, from cutting trees, transporting the
logs and even to the payment of local police and prosecution
officers.

He also questioned the Rp 500,000 to Rp 1 million fee a
company has to pay the local office of the Ministry of Manpower
each time it renews its collective labor agreement with workers.

Said Umar Husin, representing the Association of Indonesian
Hotels and Restaurants, said companies in the leisure and tourism
industry are not spared from business levies.

He cited as an example the Rp 350,000 a hotel has to pay each
month to the local Highway Traffic Agency just for putting up
sign boards on main roads indicating the way to its hotel.

A representative of the Association of the Sugar Producers
said if the 14 levies his member had to pay were abolished,
Indonesia could be well on its way to become self-sufficient in
sugar.

Hartarto promised to look into the complaints and study them
with other members of the cabinet.

He said the government's team which has prepared the
deregulation packages in recent years will take up the matter.

The team is headed by Coordinating Minister for Economy and
Finance Saleh Afiff and its members include Hartarto and Tunky.
(rms)