Government Asked to Focus on Agricultural Plantations Section

Political economy observer Riza Damanik said, extractive sectors obviously absorb large amounts of capital because they try to minimize their workforce. As a result, it is difficult to expect extractive industries to increase public welfare.
“This is different from the plantation sector, for instance the tobacco industry (IHT), which was able to absorb up to 6 million direct workers and millions more who worked in related industries,” explained Riza, Sunday (October 29, 2015).
The data shows that all of the value from state-owned companies, which was Rp 1,890 trillion, was only able to pay Rp 160 trillion in taxes (8.5 percent). And the pharmaceutical industry, with value of Rp 307 trillion, only paid Rp 3 trillion in taxes (0.9 percent). Meanwhile, cigarette factories, with an industry value of Rp 248 trillion, paid Rp 131 trillion in taxes (excise tax) (52.7 percent).
Meanwhile, as revealed in a hearing with the House of Representatives recently, Freeport paid the government Rp 487 trillion in taxes, royalties, and dividends over the last four years. Or just Rp 122 trillion per year.
“That’s the irony. The IHT pays Rp 131 trillion in excise tax, and when combined with other taxes, could reach Rp 200 trillion. Meanwhile Freeport only pays Rp 122 trillion per year. And even then, that doesn’t compare to the environmental damage caused by the mining,” he criticized.
Riza added that the contribution of mining to regional income in the east is small, while the company’s profits are largely taken overseas instead of being reinvested in Indonesia. Meanwhile, the plantation, fishery, and agriculture sectors are sustainable economic sectors that involve millions, and create more even economic growth.
With data showing large contributions to the IHT sector, Riza asserted that the government should not continue to prioritize extractive industries like Freeport. “Freeport only worsens economic disparity, especially in Papua. And Freeport is continuing that,” he added.
He reminded people that the government’s economic orientation must target the lives of many people and be based on sustainable economics, not just five-year interests. Then, every regulatory policy issued by the government, like excise tax policy, must always consider the capacity and support of industry, and should not prioritize short-term interests.
`There also has to be restructuring in the banking sector. Financial mobilization of the banking sector only goes to the extractive sector. This has to change to the plantation, livestock, and MSME sectors because their creditors won’t run off to Singapore,` asserted Riza. (Yudho Winarto/Kontan)
Editor: SanusiSource: Kontanhttp://www.tribunnews.com/bisnis/2015/11/30/pemerintah-diminta-fokus-ke-sektor-perkebunan