Regional administrations told to revoke 80 regulations

Regional administrations told to revoke 80 regulations

Kurniawan Hari
The Jakarta Post
Jakarta

The central government has asked regional administrations to
revoke at least 80 problematic regulations for fear that they
will discourage investment, a senior official said on Thursday.

The Ministry of Finance's Director General of Fiscal Balance
for Central and Regional Administration Machfud Sidik said that
the 80 regulations to be revoked were some of the 1,129 regional
regulations that had been assessed by the central government.

"The revocation order was made by the Ministry of Finance,"
Machfud said at a seminar on regional autonomy at the People's
Consultative Assembly (MPR).

Machfud did not name the 80 regulations, but confirmed that
the Minister of Home Affairs had asked regional administrations
to review those regulations.

Based on existing procedures, the Minister of Finance can ask
the Minister of Home Affairs to revoke regional regulations that
contradict those issued by the central government.

Many regulations were issued by regional administrations after
they were given the authority to do so under Law No. 34/2000,
which is enforced by Government Regulation No. 65/2001 on
regional taxes and Government Regulation No. 66/2001 on regional
levies.

Based on the law, Machfud said, regional administrations had
been given the authority to apply 11 types of taxes and 28 types
of levies.

However, instead of providing benefits to the regional
governments, the new regional regulations were considered to have
been more burdensome for investors, thereby discouraging them
from continuing their projects.

Taxes on cattle identification cards, for example, have been
regulated by the central government so that there is no need for
regional administrations to impose similar taxes on the same
thing.

Convicted Bank Indonesia Governor Syahril Sabirin also
reminded the seminar that the ambition of regional
administrations to obtain as much revenue as possible through the
imposition of taxes and levies would not help the business
community.

Syahril admitted that in the short term such a policy would
increase the income to the regions.

"But, in the long term it will discourage businessmen from
entering the regions," Syahril added.

****Box

Note: This article should have been published in our publication
on Friday, April 5, 2002. We inadvertently switched it with
another article about the sending of judges to Maluku. We regret
any inconvenience caused.

-- Editor