Finance Ministry presses ahead with reform program

The Jakarta Post , Jakarta | Mon, 08/06/2007 12:41 PM | Business

The Jakarta Post, Urip Hudiono, Jakarta

The Finance Ministry will push on with its latest efforts to reform itself despite doubts that the program has raised, focusing on public services at its tax and customs offices.

Acknowledging the skepticism towards the reform program, which was launched earlier this month and will act as a pilot project for other state bureaucracies, Finance Minister Sri Mulyani Indrawati has asked officials at her ministry to instead regard the situation as a challenge to improve themselves.

""I expect an attitude change from every unit in doing their jobs, and to continue carrying out the reforms we are doing,"" she said during the swearing-in last Friday of two of the ministry's secretariat general officials and 18 customs officials.

""There is a lot of pessimism out there regarding our reform efforts, while we are in no position as well to claim a clean slate on our track record.""

Sri Mulyani mentioned previous bureaucratic reform efforts at the customs office, which included massive salary rise, the dissolving of the unit and its later revival.

All this had, however, did little to improve the customs office -- a fact which may have led to the public's early conviction that the latest reform program may be just as fruitless.

The Finance Ministry on July 1 began rolling out its latest bureaucracy reform program, based on two ministerial decrees issued late June.

It includes improving within the next 17 months 6,475 public service procedures related to the ministry, with 35 of them being top priorities for reform.

A total of 16 of the priority public service procedures are within the tax office and customs office.

The Finance Ministry, which is responsible for managing state finances and 75 percent of state revenues, also plans to set up three large tax offices, 28 medium tax offices, 171 main tax offices, and two main customs offices at Batam and Jakarta's Tanjung Priok Ports.

Reforms at the ministry's Directorate General for State Treasury include the processing of all project proposals and assessments within 20 days after details of the state budget have been issued, and fund disbursements within an hour after a project has been approved.

The Capital Markets and Financial Institutions Supervisory Agency (Bapepam-LK), meanwhile, will within 45 days process the registration of any new publicly listed company.

President Susilo Bambang Yudhoyono has placed the Finance Ministry among the priorities for reform, approving the tax and customs office heads be replaced soon after appointing Sri Mulyani to head the ministry in December 2005.

The Finance Ministry's reform program has however also caught controversy, as it involves a benefits raise totaling Rp 4.3 trillion (US$477 million) for its some 62,000 civil servants, ranging from Rp 1.3 million to Rp 46 million for high-ranking officials.

Sri Mulyani had argued for the raise, saying it would help maintain professionalism and prevent graft among the ministry's officials.

""Without the raise, the market rule of supply-and-demand will work in regards to someone with so much talent getting paid so little,"" she said. ""What happens are cases of some officials getting so rich from we don't know where, while a tax office rookie we just trained and funded to study abroad will within two months get hijacked as a consultant by the company whose taxes he has just assessed.""

Public service reforms at the Finance Ministry:

Tax Office:

The processing of taxpayer's registration numbers for individuals within a day after a complete application has been submitted, and within three days for corporate entities.

The processing of tax refund applications within a month, and of special value-added tax (VAT) refunds within a minimum two months and a maximum 12 months.

The processing of tax assessment complaints within 12 months.

The processing of permit applications for income tax breaks on imported goods within a month, and for the actual income tax breaks within five days.

The processing of land and building tax break applications within three months.

Customs and Excise:

The processing of ""priority lane"" imported goods at ports within a minimum 20 minutes and a maximum four hours.

The processing of ""green lane"" imported goods within 20 minutes.

The processing of ""red lane"" imported goods within four hours.

The processing of ""rush handling"" imported goods within 120 minutes.

The processing of exported goods within a minimum one hour and a maximum four hours.

The processing of customs payment refunds within 30 days, and customs payment complaints within 60 days.

The processing of notices on specific imported goods within a day.

Source: Finance Ministry