Local govts told to drop planned tax on waste
Local govts told to drop planned tax on waste
Moch. N. Kurniawan, The Jakarta Post, Jakarta
The central government has asked a number of provincial
administrations to drop their plan to impose taxes on industrial
waste, unless they built a waste treatment plant.
The local governments include Riau, East Kalimantan, West Nusa
Tenggara and North Sulawesi, where big mining companies are
located.
"As the regional administrations have not yet built waste
treatment facilities, they can't just impose industrial waste tax
on firms," Yanuardi Rasudin, deputy assistant in charge of
Mining, Energy, Oil and Gas at the Office of State Minister for
the Environment, said on Friday.
If they go ahead with the planned tax, they will violate the
government regulation No. 82/2001 on water quality management and
water pollution control that only allows the imposition of taxes
on industrial waste when firms use waste treatment provided by
the regional administration, he added.
According to Yanuardi, as far as he knew, Riau, East
Kalimantan, West Nusa Tenggara and North Sulawesi administrations
had held talks with several companies to implement their
industrial waste tax plan.
He said, for example, West Nusa Tenggara administration had
talked with gold mining company Newmont Nusa Tenggara on the
planned industrial waste tax.
The central government introduced the regional autonomy law in
2001 to give more power to local governments in managing their
economy.
But the regional autonomy has become one of the major causes
of the stalled investments in the country as many regional
administrations have issued various decrees for a wide variety of
abstruse taxes to collect revenue from firms.
Red tape imposed by the newly empowered local administrations,
and illegal fees charged by corrupt officials have reportedly
also exacerbated problems for further investment.
Bambang Brojonegoro, an economist at the University of
Indonesia, said early this year the additional cost of doing
business outside Java had reached 11 percent (of total production
costs), while in Java, except for Jakarta, it had reached 10
percent.
"In the past, businesses only had to cope with central
government bureaucracy. But now they also have to deal with the
local bureaucrats.
"This double billing could make investors pack their bags," he
warned.
Foreign direct investment (FDI) approvals plummeted by 35
percent to US$9.7 billion last year from $15.06 billion in 2001.
A grimmer picture is revealed by the 57 percent drop in
domestic investment approvals to Rp 25.26 trillion (US$2.8
billion) compared with Rp 58.62 trillion in 2001.
The government is now in the process looking into possible
revisions of the regional autonomy law.