Primary regional revenue to drop more than 15%

Primary regional revenue to drop more than 15%

JAKARTA (JP): The city is preparing for a gloomy 1998/1999
fiscal year as primary regional revenue is expected to drop 15.86
percent to Rp 1.72 trillion from an estimated Rp 2.03 trillion.

During a City Council plenary session yesterday, Governor
Sutiyoso said the drop was due to Law No. 18/1997 on tax and
regional levies which came into effect on Jan. 1.

The law reduces the city's ability to collect various taxes
and levies, including parking fees and foreigners tax, Sutiyoso
said.

Under the law passed by the House of Representatives in April
last year, the central government cut local taxes from 42
categories to nine and the number of levies from 192 categories
to 30.

"But we all have to thank God and relax in order to deal with
the drop in the city's primary regional revenue, which is known
as the main earner for the budget."

Sutiyoso did not explain whether the financial crisis, which
has hit the city hard, would further decrease primary regional
revenue as many businesses stopped operation.

During his speech, the governor touched on the economic woes
which have disturbed business activities here.

"In the 1998/1999 period, the city's primary regional revenue
gained from tax is expected to reach Rp 1.47 trillion and from
levies about Rp 172.74 billion," he said.

In the ongoing fiscal period, the tax is estimated to be about
Rp 1.63 trillion and levies Rp 290.72 billion.

The predicted primary regional revenue will account for 61.62
percent of the city budget of Rp 2.79 trillion, which is 10.42
percent lower than the current Rp 3.12 trillion budget.

The remainder is expected to come from the central government,
development revenue and loans, and unused spending worth Rp 81.35
billion from the current budget.

"The calculation (for the budget draft of Rp 2.79 trillion) is
based on the prediction that the city revenue will be terrifying
and inclined toward unpredictability," Sutiyoso said.

It was drafted under the assumption of no economic growth in
the city and 25 percent inflation, the former Jakarta military
commander said.

He called on all city employees, particularly the high ranking
officials, to have "a sense of crisis" in order to think clearly
and take immediate action, if necessary, to face up to the
economic woes.

"The situation we are facing now is critical. Because of its
emergency status, an extraordinary way of handling this is
required."

Under the proposed budget, the municipality has made
significant cuts, including to expenditure for official trips,
renovation projects for schools, health centers, flood-prevention
programs and sanitary projects, Sutiyoso said.

Optimism

When asked to comment on the draft, City Council Deputy
Speaker Ade Surapriatna expressed optimism over the proposal.

"This is not final... but basically we agree with the draft.
I believe we are all affected in the monetary crisis, Jakarta's
development will not be halted.

"I'm optimistic about this and we have to maximize our
efforts. We are concerned with certain projects, such as the
labor-intensive projects."

Ade said the proposed draft would be discussed further in a
special committee and the result would be announced in a plenary
session, expected to be scheduled for next week.

Head of Commission D for development affairs Ali Wongso Sinaga
said the draft was rational, given that the country was
experiencing monetary turmoil.

He said the budget should be implemented under a thrifty
condition.

"If there are things that can be canceled, just cancel them.

"In the years to come people will experience greater suffering
than before, but the burden should be borne by all of us."

Ali said all work by the city should have added value.

"In this case, counseling people on how to handle the crisis
is a must".

The chairman of the Indonesian Democratic Party faction,
Lukman Mokoginta, said that he agreed with the governor's
insistence that all officials adopt a "sense of crisis".

"The situation forced the administration to take careful
action in implementing the budget," he said. (ind/edt/bsr)