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Local red-tape abolition must be offset with bigger grant
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Regional Autonomy Watch (KPPOD) committee member Anton J. Supit (left) shakes hands with Kediri Mayor Abdullah Abu Bakar, as Investment Coordinating Board (BKPM) deputy director for investment monitoring and implementation Azhar Lubis (right) and Indonesian Chamber of Commerce and Industry (Kadin) executive Hervian Taher look on during a discussion on regional investment in Jakarta. (The Jakarta Post/Wendra Ajistyatama)
S
everal licenses under local government authority are worth scrapping as they are redundant with those under the central government, according to Regional Autonomy Watch (KPPOD).
However, Indonesia Chamber of Commerce & Industry (Kadin) western region chairman Hervian Taher prompted the government to increase the transfer funds to compensate local governments for losses due to the local red-tape abolition.
"In the past, they [local governments] competed to increase locally generated and recurring revenues [PAD] by collecting retributions. With the license simplification, some permits must be scrapped, where then their revenue would disappear," he told thejakartapost.com in Jakarta on Thursday.
KPPOD executive director Robert Endy Jaweng said the redundant local permits, such as the Hinder Ordonantie (HO) or nuisance permit, were prone to being abused by ill-motivated peopel blackmailing businessmen in to trading the business ‘disturbance’ permit for a price.
"There are cases of neighbors working together to blackmail businessmen regarding this document," Endy said, underlining that the permit should be harmonized with the central government’s related permit.
Similar cases happened to the business location permit (SKDU), which currently is issued by village and district administrations. He recommended the license to be handed over to higher institutions to avoid misconduct and bribery.
"Based on KPPOD surveillance, they are collecting fees and asking for retribution. Also, their operations are not in accordance with standard operating procedures. It will be better if SKDU is issued by a higher administration," Endy said.
Other permits that should be harmonized are registration certificates (TDP) and business permits (SIUP). “Both are similar. TDP is for monitoring businesses while SIUP is for obtaining business legality. It takes 29 days to obtain both these permits, 15 days for SIP and 14 days for TDP," he said.
Meanwhile, UK Ambassador to Indonesia Moazzam Malik projected Indonesia would score six to seven percent of economic growth if the government managed to abolish unnecessary red tape and implement transparent and consistent regulations.
"The ease of making business needs to be improved. The request from Europe [to Indonesia] always is to ease regulations and improve its infrastructure," Malik said. (ags)
