Universities want tax incentives
Universities want tax incentives
Urip Hudiono, The Jakarta Post, Jakarta
Educators are asking the House of Representatives to consider
giving greater tax incentives for higher education institutions
on Rp 145 trillion (US$14.5 billion) of taxable items in the
sector.
The Indonesian Forum of Rectors said during a hearing on
Monday with the House committee deliberating amendments to the
tax laws, that among the potential taxable items that could be
considered for reduction or exemption, was the Rp 72.4 trillion
in national university educational spending, the Rp 40 trillion
from public participatory funds and the Rp 10 trillion of state
budget allocation for higher education.
"We are suggesting that this be considered because
universities are, in essence, non-profit institutions, and that
the saved funds can be used for better development of higher
education institutions," said the Forum chairman Wibisono
Hardjopranoto.
Along with the Forum, the House committee also invited the
Indonesian Private University Association (APTSI) and the
Indonesian Council of State University Rectors (MRPTNI), to hear
their opinions on the deliberation of the tax amendment bills.
The government has proposed a revision of the country's three
tax laws -- on general tax arrangements and procedures, on income
taxes and on Value Added Taxes -- to help increase state tax
revenues and improve the country's business and investment
climate.
Similarly speaking, APTSI chairman Suharyadi explained what
universities particularly needed at present was also the
exemption of import duties on textbooks and laboratory equipment
grants.
"We do not mind taxes on the income of faculty personnel, but
if possible, not on income taxes of the university as an
institution," he said, suggesting as well how private sector
contributions for educational purposes should be made tax-
deductible to encourage more funding for universities.
Meanwhile, MRPTNI chairman Radi A. Gani indeed said how taxes
on laboratory equipment grants had become a burden to
universities and hindered academic activities.
"We sometimes have to pay hundreds of millions of rupiah for a
piece of equipment that was actually given to us for free. In the
end, we sometimes have to reject such gifts because we do not
have the money to pay the taxes," he explained.
Radi went on to add that the government could consider the
proposed tax incentives as "compensation" for its present
inability to provide 20 percent from the state budget for the
education sector as required by law.
Next year's state budget has earmarked about Rp 35 trillion,
still less than 10 percent, for the education sector. By gross
domestic product (GDP), Indonesia spends about 1 percent of its
GDP on education, as compared to Malaysia's 5.8 percent.
As a result, members of the Forum noted, just 14 percent of
Indonesia's population aged between 19 and 25 years were
presently in college, as compared to 24 percent in the
Philippines and as high as 75 percent in South Korea.