People oppressed by 'greed levies'

People oppressed by 'greed levies'

YOGYAKARTA (JP): People are being overburdened by levies
imposed by local administrations trying to increase their
regional revenues, says a Yogyakarta-based political observer.

Pratikno, who teaches political science at Gadjah Mada
University, said on the sidelines of a seminar most local
administrations -- regencies, mayoralties and provinces -- lacked
the ability to generate revenue for their regions. The seminar,
which was held on the campus of the university, was titled
Regional Autonomy in the Wake of Globalization.

"All they know is that the simplest way to generate money is
from taxation and other kinds of levies. Regretfully, they now
enjoy full authority in managing their regions, including the
authority to impose levies," he said. "Such an arbitrary
imposition of levies can be seen as the result of greed."

He warned that the actions of the regional administrations
could destroy the intent of decentralization, which was to
enhance the welfare of the people.

He cited the results of a recent study by the Socio-Monitoring
and Early Response Unit, a Jakarta-based non-governmental
organization, which showed regional administrations had been
overzealous in imposing new duties.

"According to the research, somebody who wants to ship
commodities from West Nusa Tenggara to Jakarta has to pay 22
different levies.

"Don't be surprised when in Jakarta a cow from West Nusa
Tenggara is more expensive that a cow imported from Australia.

"However, the local administrations are not solely to blame.
The central government must also be held responsible. The general
allocation funds (DAU) from the central government are
insufficient to cover the routine expenditures of local
administrations," he said.

Pratikno said the state budget deficit made it virtually
impossible for the central government to rely on its budget to
provide regional administrations with adequate funds.

"Other financial sources must be found to provide local
administrations with adequate DAU, especially for poor
provinces."

He acknowledged that some provinces, including Riau,
Kalimantan and Irian Jaya, were relatively well-off because of
their abundant natural resources

"The central government could sell its lucrative (state-owned)
companies to the rich provinces to raise funds. The Riau-based
state-owned plantation company, for example, could be sold to the
Riau provincial administration.

"The central government must allocate adequate funds to poor
regions to stop local administrations from exploiting the people
through taxation. At the same time, the central government should
make laws to regulate tax codes in all regions," he said.

Pratikno also suggested poorer provinces begin courting richer
provinces to invest in their areas, adding that poorer regions
generally had to improve their approach to attracting
investors.(44)