City denies link between new tax decrees and subway<\/p>\n
JAKARTA (JP): Jakarta is the most developed province in
\nIndonesia. It has high-rise buildings, a multitude of nightspots,
\nmalls and inner-city toll roads.<\/p>\n
It also has lingering traffic woes.<\/p>\n
The administration plans to build a Mass Rapid Transit (MRT)
\nsystem next year, which will connect Blok M in South Jakarta and
\nKota in West Jakarta. A presidential decree on the project has
\nyet to be issued.<\/p>\n
Little has been revealed of how much the US$1.5 billion
\nproject will cost the public. There have been suggestions of
\nintroducing congestion charges in which motorists would be
\ncharged Rp 1,500 to Rp 3,000 on roads along the subway route
\nduring peak hours.<\/p>\n
The 14.5-kilometer underground subway is expected to ease
\ntraffic congestion. Material losses caused by air pollution,
\nlargely caused by vehicle emissions, is estimated at US$600
\nmillion a year.<\/p>\n
With each year of delay, the MRT project will become more and
\nmore expensive.<\/p>\n
A consortium of Indonesian, Japanese and German companies was
\nset up to raise $8 million for the basic design.<\/p>\n
The rest of the project must be funded by private businesses
\nand the public.<\/p>\n
In April a working group of the project suggested the
\nadministration introduce various taxes to increase city revenue
\nand finance Jakarta's first subway system.<\/p>\n
Decrees on many of the taxes already exist but have not been
\nenforced.<\/p>\n
In August, four months after the working group's proposal, the
\nadministration and the council sped up the enactment of new
\ndecrees on taxes and fees. But both parties denied the decrees
\nhad anything to do with the MRT project, and insisted they were
\nonly to add to the city's revenue.<\/p>\n
From August to October the council passed six decrees on
\nregional taxes.<\/p>\n
Four decrees, passed in a record one month, were those on the
\n500 percent increase of annual foreigners tax; the new 10 percent
\ntax on electricity produced by generators of above 60 KVA; an
\nincreased entertainment tax; and the control of alcohol
\ndistribution through higher distributor license fees.<\/p>\n
Another was the decree on higher prices of city-issued labels,
\nnecessary for request forms to obtain services like block plans
\nfrom the city planning agency.<\/p>\n
The other decree increased fees of various city services.<\/p>\n
In October, Hemly AR Syihab, chairman of the council's
\nCommission C for city revenue, said there would be at least two
\nmore bills passed; one on new parking fees and the other on
\ncongestion pricing.<\/p>\n
Regardless of the link taxes and fees have to the MRT project,
\nit is high time the municipality explained exactly how it intends
\nto finance the MRT project.<\/p>\n
The basic design on the 17-station subway is already
\ncompleted. But a presidential decree must be issued before the
\nmunicipality can start gathering funds from the public.<\/p>\n
If people are led to expect concrete action to overcome
\nJakarta's traffic blues, they must also be told the sacrifices
\nexpected of them.<\/p>\n
Target<\/p>\n
Some of the new decrees bring to mind the proposals of the MRT
\nworking group. Slamet Soelarno, administrative and finance
\nmanager of the group, earlier said the city needs to raise $25
\nmillion a year for the city's equity in the project, and another
\n$35 million a year to pay back loans for 25 years.<\/p>\n
He recommended raising funds by reactivating lapsed tax rules,
\nincreasing existing taxes and fees, and drawing new fees or taxes
\non city services.<\/p>\n
The group recommended a tax on electricity generators, a fuel
\ntax and a tax on parking lots.<\/p>\n
So far only the tax on generators has been enacted into a
\nprovincial decree.<\/p>\n
If the proposals are accepted, there will be increases in
\nmotorized vehicle taxes, traffic insurance, advertisement taxes,
\nand higher fees for services such as acquiring land use permits.<\/p>\n
The working group estimated the administration could collect
\nat least Rp 300 billion per year from the suggested taxes and
\nfees.<\/p>\n
This could increase city regional revenue to Rp 3.36 trillion
\nby 1998, Slamet said, a much larger target than the city's goal
\nof Rp 1.87 trillion for the 1996\/1997 fiscal year.<\/p>\n
Currently city revenue comes from various fees and taxes such
\nas vehicle tax, vehicle ownership transfer tax, entertainment
\ntax, development tax, advertising tax, and city planning and
\ndevelopment supervision fees.<\/p>\n
The administration may be putting of announcing that society
\nis to pay for the MRT project for fear of public outrage.<\/p>\n
Many people have raised concerns of whether it is geologically
\npossible for the city to have a subway.<\/p>\n
Others have said reports of corruption and lack of maintenance
\nwill only lead to MRT disasters.<\/p>\n
But while the administration waits for the presidential
\ndecree, it would do well to explain the ins and outs of how the
\nproject will affect people.<\/p>\n
A sudden announcement of new taxes and fees may only serve to
\nspark resentment on top of a lifetime of frustration in coping
\nwith traffic and public transportation. (yns\/anr)<\/p>",
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