Taxes and illegal fees

Taxes and illegal fees

The draft state budget for fiscal year 2004 predicts a decrease in state revenues from 17.3 percent to 17.2 percent as well as in state spending from 19.1 percent to 18.4 percent. It also states that revenues from taxes are likely to increase from 13.1 percent to 13.5 percent.

The present state budget shows that Indonesia's due debt stands at Rp 44.279 trillion and debts for rescheduling at Rp27 trillion. Next year, however, Indonesia will face maturing debts worth Rp 44.891 trillion due to its decision to sever its ties with the International Monetary Fund (IMF) later this year.

The question is whether or not the directorate general for taxation is capable of achieving the target, as stated in the draft state budget.

The problem is if tax revenues continue to increase, the business climate is likely to become gloomy because besides paying tax, companies are often forced to pay illegal fees as well.

Thus, if the government intends to make taxes as the primary source of state revenues, illegal fees should be scrapped.

-- Media Indonesia, Jakarta