Mar'ie reaffirms high budget discipline

Mar'ie reaffirms high budget discipline

SEMARANG (JP): Finance minister Mar'ie Muhammad reaffirmed
over the weekend the importance of maintaining a high degree of
budget discipline.

"Constraints on foreign loans and limited availability of
domestic funds are forcing the government to strengthen its
budget discipline," Mar'ie told a seminar on taxation here.

He warned that Indonesia might encounter more severe financial
constraints to its development projects during the current 25-
year long term development plan if it could not properly mobilize
its potential domestic financial resources.

He cited the Rp 660 trillion (US$305 billion) in new
investments needed over the next five years to generate annual
economic growth of seven percent, the minimum economic expansion
required to absorb the 2.5 million new entrants into the labor
market every year.

"A stringent and sound policy regarding budget management is
therefore an absolute prerequisite to prevent our 'boat' from
sailing into a dangerous stream," he said.

Mar'ie was accompanied by Tax Director General Fuad Bawazier
at the seminar which was organized by Diponegoro University.

"The government will never hesitate to turn down projects
proposed by any ministries or other government agencies which do
not directly support the top priority development programs," he
said.

He said that ministries and other government institutions
should carefully study the merits and the economic efficiency of
any projects they plan.

"I am not referring to any specific projects but am talking
about the basic economic policy which is required to manage our
limited budget," he said.

The mass media over the last few weeks highlighted the heated
debate over budgetary allocations for the procurement of 39 used
warships from Germany.

"It is high time all the rank and file within the bureaucracy
shift their working attitude from a spending-oriented habit into
one of revenue generating," he said in reemphasizing the urgency
of maintaining high budgetary and fiscal discipline.

This means, Mar'ie added, high spending discipline should be
supplemented by a vigorous tax collection drive to increase
government receipts available to finance development projects.

He said some Rp 40.07 trillion of the Rp 59.74 trillion in
internal government revenues envisaged for the current 1994/1995
fiscal year are expected from direct and indirect tax receipts
outside the oil sector.

"It is not an easy task for us," he added.

According to the 1994-1995 state budget, some Rp 18.84
trillion is expected from income tax, Rp 13.23 trillion from
value added tax, Rp 3.44 trillion from import tax, Rp 2.62
trillion from excise duties and Rp 1.62 trillion from property
tax.

Mar'ie said the government therefore will continue to broaden
the tax base and intensify tax collection.

Citing an example of the tax efforts to be stepped up, the tax
director general said that he will set up a tax office in the
Jakarta Stock Exchange to secure the collection of taxes due from
transactions. (fhp)