President backs war on levies
President backs war on levies
JAKARTA (JP): President Soeharto yesterday gave his full backing to Minister of Manpower Abdul Latief's plan to phase out various business levies charged by his ministry, and suggested that other government agencies should follow suit.
Speaking after meeting the head of state, Latief announced that his ministry was prepared to abolish 17 levies from next month, to help Indonesian businesses become more competitive in the global market.
The minister, a former businessman himself, said Indonesian companies have been saddled by too many official, as well as unofficial, levies.
He said even the President considered the move to phase out the levies as courageous.
"The President said we have to be bold. Every department must eliminate levies which have no bearing on production," he said after the meeting.
Latief said his efforts will not stop there. He plans to seek the help of Minister of Home Affairs Moch. Yogie S.M. to phase out manpower-related levies imposed by provincial administrations.
The move is part of an overall effort to eliminate factors which contribute to high costs of production.
"If all departments can do this, and the President said we have to be brave and do it, then many things can be accomplished and many more become brisk and good," he said.
Latief said that if he kept repeating the words brave and courageous yesterday it was because the President also repeatedly stressed the need to have courage.
He said it was not just official levies which should be abolished but also the unofficial ones. He contended that hidden levies are absorbing more money than official ones.
"The actual amount collected isn't much," he said of the accumulative official levies at the Ministry of Manpower. "It doesn't go over Rp 2 billion (US$869,500) a year. But it is usually the unofficial ones which are much higher than the official ones."
Latief said he had also been instructed by the President to convey the need to reduce levies to other ministries.
Dialog
The President also supported the open dialog he launched with members of the Indonesian Chamber of Commerce and Industry (Kadin), which helped raise awareness of this issue, and added that if necessary he too will get involved.
When pressed by journalists on the question of raising the meager salary of civil servants, often identified as the catalyst of these unofficial levies, Latief said it was still under consideration.
The government is currently deliberating with the House of Representatives on whether to raise civil servant wages for the 1996/1997 fiscal year and if so by how much.
Latief also reported that Jakarta and Kuala Lumpur have reached an agreement on the protection of Indonesian housemaids working in Malaysia.
Under the deal, servants would be guaranteed one day off a week and other amenities relating to their protection.
Indonesia is planning to enhance the skill of the workers, by training them before they left.
"We can train them how to use a washing machine, iron a silk shirt and how to take care of a baby," he said.
For this training the president has consented to the possibility of providing bank credits of up to Rp 3 million so the workers can enlist in the government classes.
"We'll discuss the interest with Bank of Indonesia. We're asking them if possible to give us 12 percent," Latief explained.
He estimated that Indonesian workers could return with up to Rp 10 million after one year in Malaysia. Latief quickly pointed out the potential for helping the village economy if those workers go home with their savings.
Speaking of the Idul Fitri bonuses which workers here will receive, Latief called on people not to spend their money hastily on frivolous items, but to save it for future needs.
With a workforce of some 30 to 40 million receiving at least an extra month's salary for their bonus, the additional amount of money in circulation is expected to reach Rp 4 trillion to 4.5 trillion. (mds)