Provinces want more contributions from state firms

Provinces want more contributions from state firms

By Berni K. Moestafa

DENPASAR, Bali (JP): Minister of Finance Bambang Sudibyo said
here on Thursday the government was considering requiring state
companies to contribute more to the regions in response to
demands by local residents and administrations.

The minister said he agreed with the locals about the need to
enhance the role of state companies in empowering the local
economy.

"We're considering a program which would allow state firms to
make more contributions to provinces aside from taxes," Bambang
said here during a road show to promote a regulation draft for
the implementation of the law on intergovernmental fiscal
balance.

During his visit in Bali, Bambang also met with
representatives of local governments from East Nusa Tenggara,
West Nusa Tenggara and Irian Jaya.

"Almost every province has questioned the contributions of
state firms to their regions," he said in reference to his
previous visits in other provinces. He said local governments in
Sumatra had questioned him about the contributions of state port
operators, plantation firms and forestry firms.

In Java, he said, the local administrations demanded state
telecommunications company PT Telkom and state electricity
company PT PLN contribute more to their budgets.

Bambang, however, declined to say how state companies might be
made to contribute more to local governments, saying this
required more thought.

According to him, some provinces took pride that companies had
chosen them as their bases of operation. "It is because of the
provinces' efforts that investors are willing to enter their
regions."

He warned that imposing various taxes on firms would frighten
off state companies and foreign investors. Furthermore, he said,
if local governments asked for an increase in tax payments from
the companies, the regions could benefit very little. "Since many
companies are registered in Jakarta, their tax payments will go
straight to Jakarta."

Nevertheless, he said, at least 25 percent of tax payments
would return to the provinces in the form of general fund
allocations from the central government to the local governments.
"It is through the general fund allocations that companies
contribute to local governments."

He also reminded local governments that companies in their
regions boosted employment levels, which in turn had a multiplier
effect on local economic activity.

The minister said many local communities expected state
companies not only to create job opportunities for locals, but
also to share their profits with them.

"This request is not simple and we in Jakarta must give ample
thought to this, including asking the opinion of the state
minister of investment and state enterprises development," he
said.

However, he said, the government was open to any request,
adding that the meeting here with representatives from a number
of provinces was partly to hear out their demands.

Bali's deputy governor for economic affairs, I Ketut Widjana,
said his province should derive greater benefit from Ngurah Rai
International Airport, which is operated by state-owned airport
management company PT Angkasa Pura I. "If there was a mutual
understanding between the company and us, we could discuss its
offer," he told The Jakarta Post.

According to him, Bali lacked many facilities that Angkasa
Pura could help provide. Asked what he expected from the company,
Ketut said it should share some of its profits with the province.

"How much of their revenue can they give as a contribution to
the province?" he asked.(bkm)