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The government has recommended the annulling of at least 30
local ordinances from different parts of the country as they hampered
the development of cooperatives and small and medium enterprises (SME).
"We've evaluated 70 ordinances that could slow down the growth of
cooperatives and SMEs, and we have recommended the annulling of around
30 of them this year," said Untung Tri Basuki, an assistant to the
deputy for regulation at the Cooperatives and Small and Medium
Enterprises Ministry.
He said Thursday that the 30 ordinances conflicted with the 1992
Cooperatives Law, which stipulates that the development of microfinance
institutions must be facilitated and imposes an obligation on the state
to boost the sector.
The problematic ordinances, by contrast, only burdened cooperatives and
small business by imposing fees on them, as was the case in Makassar,
South Sulawesi, and Bandung, West Java, he said.
In Makassar, as the result of a 2003 ordinance on charges for
corporations and cooperatives, a cooperative has to pay Rp 950,000
(US$104) to have its establishment officialized. This consists of Rp
550,000 for recognition as a legal entity, Rp 300,000 for amendment of
statutes and Rp 150,000 for reregistration every three years.
These fees do not include an additional levy of 25 percent of annual
net profits for cooperative-sector development.
In Bandung, meanwhile, a 2001 ordinance on charges for cooperative
permits and services requires a cooperative to pay around Rp 500,000 in
fees and taxes, including Rp 250,000 for opening a new branch and
between Rp 25,000 and Rp 250,000 for asset reregistration.
"This is really ridiculous," said Untung. "Based on our regulations,
the central government is the only government that has the power to
issue permits for the establishment of cooperatives. Local ordinances
shouldn't impose any fees on cooperatives."
Regarding profits, he was quoted by Antara as saying that it was up to
a cooperative to decide whether it would retain these as a contingency
fund, use them for training needs, or distribute them among its members.
"It's fully with their right to decide how to allocate the money,"
Untung said.
According to figures from the Cooperatives and Small and Medium
Enterprises Ministry, the government revoked 44 ordinances in 2005 and
25 others in 2006 for hampering the development of cooperatives and
SMEs.
In June of this year, the government annulled another 10 such
ordinances.
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