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)