Regional autonomy abused to take levies, says Ryaas

Regional autonomy abused to take levies, says Ryaas

JAKARTA (JP): The Regional Autonomy Law, No. 22/1999, has been
exploited by certain governors, regents and mayors to take
illegal levies from foreign investors, a minister claimed on
Monday.

State Minister of Regional Autonomy Ryaas Rasyid told a
hearing with the House of Representatives' Commission II for
domestic and legal affairs that due to rampant levies the
Singaporean government and some foreign companies had to take
action that might wreak havoc to the investment climate in the
country.

"Reliable sources told me that Singapore has added several
provinces and regencies to its negative investment list in
Indonesia," Ryaas said.

"Other bad news is that at least 13 foreign oil companies have
stopped operating here due to the levies."

He stopped short of identifying the regions or companies, but
said the levy taking had become a trend since the regional
autonomy law was passed last year.

The government has set Jan. 1 next year for the full
implementation of the law, along with the law on fiscal balance
between central and local governments.

Illegal levies asked by government officials dealing with
licenses have also become the main concern of domestic investors,
who blame them for the high-cost economy.

A related government regulation issued in May which delineates
the authorities of regional government does not elaborate on the
rights of local governments in the investment field.

Ryaas said the government was now preparing a regulation which
would rule on, among other things, the levies and taxes regional
administrations could take.

"We call on the governors and the regents to stop the practice
since it will add burdens to the companies," he said.

He said the regulation and other seven regulations related to
regional autonomy were expected to be completed in September.

"We hope the regional autonomy law can be applied right on
schedule in January next year, after all the government
regulations are completed," he said.

He claimed that all the ministries in the Cabinet supported
the regional autonomy, including the Ministry of Forestry and
Plantations. He said he himself approached his colleague the
forestry minister to make him accept the law.

Ryaas said there has been a tendency for the ministries to try
to sell their assets, which, according to the regional autonomy
law, should be handed over to local governments.

"We should watch over this (tendency). They apparently remain
reluctant to give the assets to the regional administrations," he
said.

He said President Abdurrahman Wahid had repeatedly asked his
Cabinet ministers to comply with the law.

Ryaas also pointed out that the spirit of regional autonomy
had created strong local legislative councils. This has caused
some excesses, including legislators in some of provinces trying
to sack their governors.

"Not all the governors who were elected in the past regime are
bad people. The legislative council should not arbitrarily
dismiss the governors," he said.

He said a governor's annual report before the local
legislature is mandatory according to the law, but could not be
used to topple the governor.

"But if the dismissals are related to legal cases, they could
be conducted any time," he said. (jun)