Jakarta acts to restore order amid fear of more unrest: despite rate boost, riot-quelling, worries remain that moves don't address issues effectively

Article Abstract:

The Indonesian government has placed the military on alert to prevent any riots and has increased interest rates to stem the rupiah's slide against the dollar. The move is to build the confidence of foreign investors, who are concerned about the effects of the Indonesian riots on their investments. While the stock market index has shown a temporary increase of about 5.3%, the country's currency slid to as high as 10,000 rupiah against the dollar in July 1997, before stabilizing at 9,250 rupiah to the dollar. Indonesian economic observers fear that only a change in leadership could appease the rioters, who are reacting strongly to the sharp increase in fuel prices.

Administration of General Economic Programs, Currency Stabilization Programs, Prices and rates, Currency stabilization, Rupiah (Indonesia)

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In quest for revenue, Jakarta unveils tax on real-estate sales

Article Abstract:

Indonesia has strengthened its tax revenue system by imposing a new tax on the sale of property. The new regulation involves the charging of a one-time tax equivalent to 5% of transaction costs incurred by either individuals or firms on real estate sales that reach no more than 60 million rupiah equivalent to $27,390. The country has already a relatively extensive property tax setup where ownership of buildings and land are routinely taxed. However, the fondness of Indonesians to skirt the law and the many loopholes in it have undermined national goals.

Taxes NEC, Taxation, Tax policy, Real property tax, Real property taxes

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Indonesia's new budget sets 16% boost in spending

Article Abstract:

The Indonesian government has proposed a 16% increase in its 1996 budget. Government finance officials noted that the $39.96 million increase in the budget is important to prevent a possible economic overheat brought about the the rise in imports and inflation. Some economists predict that government spending on infrastructure will decline while spending on other sectors will increase throughout 1996.

Budget Process, Analysis, Budget, Budgeting, Budgets, Government spending policy

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