City Council okays draft changes to vehicles bylaws<\/p>\n
JAKARTA (JP): The City Council approved yesterday the drafts
\nof two city bylaws which will revoke the progressive vehicle
\ntaxation system and significantly reduce tax for cars and vehicle
\nownership transfer.<\/p>\n
After several revisions were made to the Vehicle Taxation
\n(PKB) and Tax on Vehicle Ownership Transfer (BBN-KB) drafts, the
\nbylaws were read out by Speaker Edy Waluyo during a plenary
\nsession.<\/p>\n
Council's approval was apparently fast-tracked as it was
\ninitially scheduled to be ready in March.<\/p>\n
The proposed regulations will be handed over to the governor,
\nwho must review and submit them for approval to the minister of
\nhome affairs, before ratifying the bylaws.<\/p>\n
The bylaws are expected to be effective as of April 1.<\/p>\n
Under the proposed regulations, the PKB -- the tax that should
\nbe paid by car owners -- will be lowered from 5 percent to 1.5
\npercent of the price of vehicles.<\/p>\n
The BBN-KB tax rate for subsequent vehicles is to be reduced
\nfrom 5 percent to 1 percent of the vehicle's price.<\/p>\n
Under the existing bylaw -- which City Council approved in
\nJuly 1994 and became effective on April 1, 1995 -- vehicle owners
\nare required to pay 120 percent of the national tax rate for a
\nsecond vehicle, 140 percent for the third, 160 percent for the
\nfourth, 180 percent for the fifth and 200 percent for the sixth
\nand subsequent vehicles.<\/p>\n
The progressive car taxation system was originally designed to
\nboost city revenue and discourage private car ownership in a bid
\nto solve the capital's burgeoning traffic problems.<\/p>\n
The city administration decided to revoke the system as it did
\nnot increase local tax revenue and owners of more than one car
\ntook advantage of loopholes.<\/p>\n
For example, multiple-vehicle owners used the names of
\nrelatives for additional vehicles to avoid paying tax.<\/p>\n
Under the new draft, which consists of 21 chapters and 41
\narticles, the PKB tax rate calculation will be based on various
\nmeasurements, including the price, age and several technical
\naspects of the vehicles.<\/p>\n
The weight of a vehicle is also taken into account because of
\nthe additional damage it may cause to the roads and environment.<\/p>\n
Owners of large vehicles will no longer have to pay the BBN-
\nKB, while individuals and corporations operating ambulances,
\nhearses and fire engines will pay less than half of the new rate
\nunder the proposed bylaws.<\/p>\n
City Revenue Office has been empowered to send a final notice
\nto owners who fail to pay the tax on time.<\/p>\n
City Council members said yesterday the draft bylaws would
\nhelp boost city revenue from PKB and BBN-KB, which is expected to
\nreach Rp 197.4 billion in the 1997\/98 fiscal year -- about 11.5
\npercent of Jakarta's total revenue.<\/p>\n
The capital currently has 2.67 million vehicles.<\/p>\n
Councilors from the United Development Party (PPP), the ruling
\nGolkar and the Armed Forces factions said the PKB regulation, for
\ninstance, was environmentally friendly as the tax rate was based
\non a vehicle's capacity to damage the environment.<\/p>\n
Members of the Indonesian Democratic Party (PDI) reminded the
\ncity administration to continue its efforts to eliminate
\ncorruption and improve the city's traffic management system.<\/p>\n
"One of the current obstacles in improving city revenue
\nstemming from vehicles is bureaucratic complexity," the party
\nsaid in a release. (ind)<\/p>",
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