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)