Batam (ANTARA News) - The Tax Directorate General agreed to set the income tax on property at one percent of the price of a low-cost house or flat, general chairman of Real Estate Indonesia Teguh Satria said in Batam Tuesday night.
Lost-cost homes and flats will be subject to an income tax of five percent of their sales price.
"The tax director general has expressed agreement, but implementation still has to wait for a government regulations," he said.
A new Government Regulation on property income tax may be issued in March.
Right now the property income tax was set at 30 percent of company`s total net profit.
Teguh said that the income tax based on sales price is more effective than based on net profits.
If it is based on net profit, he said a company will have a chance for a collusion with tax personnel.
But he said that an income tax based on sales price would minimize collusive practices.
If the income tax of 1 percent of sales price, he said, at least Rp5 trilliun would be gained by the state in 2007.
"House sales reached Rp500 trillion," he said.(*)