National car Soeharto's mistake

National car Soeharto's mistake

On Dec. 9, 1998 Soeharto, former president of the Republic of
Indonesia, was questioned by the investigators from the Attorney
General's Office regarding, among other things, the national car
program. To make the matter clear, allow me to reveal the
following:

a. Two policies were implemented by the former president
regarding the national (Timor) car issue.

The first was Presidential Decree No. 42/1996, which regulated
the technical policy allowing the importing of sedans from South
Korea. The concept was devised by former minister of industry and
trade Tunky Ariwibowo.

The second was Presidential Instruction No. 2/1996, which
instructed the minister of finance to grant PT Timor Putra
Nasional (TPN) exemption from the import duty and the sales tax
on luxury goods on the import of sedans from South Korea. The
concept was devised by former minister of finance Mar'ie
Muhammad.

b. In Presidential Instruction No. 2/1996 it is stated that the
tax debts arising as a result of the importing of sedans from
South Korea by TPN will be borne by the state. This means that
the state is extending a tax subsidy to TPN, obviously resulting
in the state incurring losses.

c. Based on Article 23 of the 1945 Constitution, every year a
draft budget of revenue and expenditure must be submitted by the
government to the House of Representatives (DPR). All the state's
revenue and expenditure must be listed in this draft budget and
the draft budget must be ratified by the DPR. All subsidies
should be included as spending (expenditure), for example the
fuel subsidy, the fertilizer subsidy and the subsidy for regional
autonomy.

d. In reality the granting of a tax subsidy to TPN on the basis
of Presidential Instruction No. 2/1996 has never been set forth
in the State Budget or in the supplementary State Budget ratified
by the House.

e. So the policy as stipulated in Presidential Instruction No.
2/1996 violated Article 23 of the 1945 Constitution, with respect
to both sub-article (1) because the tax subsidy was not included
in the State Budget and sub-article (2), because the tax law was
violated (There is no tax-free facility whatsoever in the
prevailing tax law).

f. So these presidential policies profited only TPN, 99 percent
of whose shares are controlled by Hutomo Mandala Putra, former
president Soeharto's youngest son. In this respect the element of
a criminal act of corruption based on Law No. 3/1971, namely
"violating the law, inflicting losses on the state and benefiting
oneself or another party" is conclusive. Obviously, there was
corruption, collusion and nepotism.

It is up to the attorney general to draw his own conclusion.
Also it is up to him whether or not to prosecute former president
Soeharto on the basis of Law No. 3/1971.

Finally Mar'ie Muhammad, former minister of finance, must be
summoned as a witness.

SUHARSONO HADIKUSUMO

Jakarta