Soeharto’s Indonesia: A Better Class of Corruption 105
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Rights to take over land. The grant of rights to take over land, in practice
without payment of fair compensation to the original occupiers, has been a
method often used to generate rents. This has occurred with land around
major cities, and also with tracts of forest to be converted into plantations.
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Purchase of inputs at artificially low prices. In many cases firms have been
favoured by being permitted to purchase inputs at artificially low prices from
state enterprises — if they were paid for at all.
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Favourable treatment by the tax office. The business sector has always been
able to reduce the amount of legitimate tax it paid through negotiation of
mutually beneficial outcomes with Soeharto franchisees in the tax office. In
addition, at various times the Soeharto government made tax holidays
available to firms it wanted to favour.
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