Provinces told to be 'unaggressive' in collecting tax
Provinces told to be 'unaggressive' in collecting tax
JAKARTA (JP): Director general of taxation Mahfud Sidik warned
provincial and district administrations on Tuesday not to be over
zealous in collecting tax revenue once the regional autonomy
policy is implemented next year.
Mahfud said an aggressive tax policy would only create too
much burden to the people and deter both local and foreign
investments.
"The regional autonomy will push regions to be more creative
in taking advantage of their potential to raise revenue, but
please don't be over zealous because it will only create more
burden for the people," he told reporters following a seminar on
tax in Surabaya.
He said that provinces or districts, particularly those
lacking natural resources, could resort to other means of raising
revenue like cutting down on the bureaucratic red tape to attract
more investments.
Mahfud also said that the regional governments should not only
focus on collecting tax but must also improve the quality of
their bureaucratic service to the public.
The regional autonomy policy is scheduled to be implemented
early next year. The measure includes a fiscal decentralization
policy allowing provincial or district administrations to design
their own fiscal policy including tax.
Asked about the possibility of multiple taxation by the
central and regional governments, Mahfud said that in the long
run multiple taxation must be fully eliminated.
He also said that in more developed nations, such multiple
taxation rarely occurred.
Meanwhile, Finance Minister Bambang Sudibyo said that the
government was preparing a set of rulings to support the
implementation of the fiscal decentralization policy.
"The fiscal decentralization must be implemented at the latest
by January 2001. The supporting regulation must be immediately
completed and can't be delayed," Bambang said.
"If there's a delay even just for a year, it will create huge
problems," he added, but didn't provide further explanation.
Bambang, however, has repeatedly said that the implementation
of the regional autonomy policy was crucial in maintaining the
unity of the country.
He said that even with a small sign of a delay from the
central government, the regional governments would be deeply
disappointed and would no longer trust the central government.
He said if such a scenario happened, the country might have to
deal with serious insurgents in various provinces and districts.
(rei)