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)