Regional administrations asked to revoke restrictive regulations

Regional administrations asked to revoke restrictive regulations

The Jakarta Post, Jakarta

Minister of Home Affairs Hari Sabarno said on Monday that he
had officially asked regional administrations to revoke a total
of 71 regional regulations on tax and levies considered to be
inhibiting investment and economic development.

Hari said he had decided to allow the regions to revoke the
regulations themselves rather than use the central government's
power to annul them.

"We can't simply annul the regulations, because we don't want
to return to the old paradigm. Therefore, it is better to let
(the regions) do that themselves," Hari said.

The ministry's move followed a request from the Ministry of
Finance.

Director general of decentralization Machfud Sidik said last
week that revocation of the rulings was requested by the
International Monetary Fund (IMF) during recent meetings with the
government regarding its the fourth Letter of Intent (LoI).

As a matter of fact, Machfud said, the IMF identified 100
regional regulations that it considered to be hampering business
and investment and, therefore, should be revoked.

The ministry is still reviewing the remaining 29 regulations
included on the IMF list, Machfud said.

"We can't simply revoke the regulations. We have to review
them one by one and must be careful (in doing so) because, at the
same time, we must motivate the regional governments to boost the
utilization of their resources," he said.

Machfud pointed out that, based on the Law No. 34/2000 on
taxation, the central government could annul any rulings issued
by the regions that conflicted with higher regulations or
statutes.

The number of rulings on the IMF list is still much smaller
than those suggested by the Indonesian Chamber of Commerce and
Industry (Kadin), which stated last month that there were more
than 1,000 regulations impeding business.