Proposal to Limit Regional Taxes
Monday, 08 May, 2006 | 16:35 WIB

TEMPO Interactive, Jakarta: The government has proposed to limit taxes that are allowed to be collected by provinces.

Fadel Muhammad, Governor of the province of Gorontalo, has said that he supports the government’s proposal.
According to Fadel, the measure is necessary because the more regional taxes imposed, the more investment in provinces is held up.

The Governor of Gorontalo believes that the central government has never been clear in determining the taxes allowed or not allowed to be collected by provinces.

However, he said that the Home Affairs Department measures the success of provincial governments based on their Regional Original Revenues (PAD).

“As a result, provinces only compete with each other in collecting taxes and other levies to increase their PADs,” said Fadel in Jakarta, last week end.

He is of the opinion that the standards of province's performance are not fair and counter-productive in terms of policies to attract investors.

So, said Fadel, the Regional Tax and Retribution Draft Bill is a positive measure.

“What we want is for the levies that have been burdening members of the general public be replaced by more definite taxes,” said Fadel.

Although Gorontalo's PAD tends to increase from year to year, Fadel said that investment to regions is important because it certainly will create new job opportunities for people.

Currently Gorontalo's PAD is between Rp50 billion and Rp60 billion.

Agus Supriyanto