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)