Major taxpayers urged to give more to the poor

Major taxpayers urged to give more to the poor

JAKARTA (JP): The government is drumming up support for a new
presidential decree which calls on big corporate and individual
taxpayers to contribute more to the campaign to eradicate
poverty.

Presidential Decree No. 90/1995 calls on individuals who earn
more than Rp 100 million (US$43,000) after income tax to donate
up to two percent of their surplus to a new fund for the poor.

Minister of Population/Chairman of the National Family
Planning Board Haryono Suyono quoted President Soeharto as saying
yesterday that contributions from people who earn less than Rp
100 million will also be welcomed.

"The President Soeharto asks all investors, both domestic and
foreign, to help make the scheme a success," Haryono told
journalists after meeting with the President.

The government expects the revenue resulting from the decree
to raise at least Rp 250 billion a year for a poverty eradication
fund.

According to official figures, an estimated 25 million of
Indonesia's 195 million people still live in poverty.

The government draws the poverty line on the basis of a
minimum daily calorie intake of 2,100, and a certain quantity of
non-food consumer goods and services.

Haryono said the funds will be channeled to about 11.5 million
impoverished families in areas uncovered by the government's
assistance for underdeveloped villages or Inpres Desa Tertinggal.

The contributions from the wealthy donors will be channeled
through the state-owned Bank BNI, in the form of business loans
with an interest rate of between 6 and 10 percent, he said.

Business consultant Laksamana Sukardi and businessman Adiputra
Tahir welcomed the government's move, although they differ on how
the new Decree should be implemented.

Laksamana said he does not have the slightest doubt about all
the good intentions behind the decree, but he pointed out that
much needs to be finalized to make it workable.

"It is a good move to make more equitable distribution of the
development cake. The challenge is that the government has to
make the implementation accountable to the public," he said.

The government should include the donation for the poor in the
state budget so that it will be open for scrutiny by state
supervisory bodies, such as the Supreme Audit Agency and the
House of Representatives.

"Otherwise, the scheme will only create more problems and room
for irregularities," said the former banker who is now a
politician affiliated to the Indonesian Democratic Party (PDI).

Laksamana also questioned why the scheme is regulated by a
Presidential Decree and not by a law, which requires the
involvement of the House of Representatives.

He warns that the ambiguous rules of the decree will make the
scheme an additional burden to businesses, who already have to
pay various taxes.

Laksamana said the decree overlaps with the law on taxes and
the implementation can cause confusion.

Meanwhile, businessman Adiputra Tahir said he expected no
major hurdles in the implementation of the scheme because he
believes the government already has a clear concept.

"The donation scheme is an excellent idea," said the former
chief of the Association of Indonesian Young Entrepreneurs. "It
needs some kind of sacrifice from the haves to help the poor."

The wealthy, he said, has the social duty to help their poor
compatriots to improve their living standard.

"I hope that (rich) people are honest about their wealth. No
one should conceal their fortune to avoid their social duty,
which is to help the poor," he said. (pan)