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