Councilors query 5% fuel tax application<\/p>\n
JAKARTA (JP): City councilors questioned yesterday the
\napplication of a 5 percent tax on fuel, earmarked for the city
\nadministration as compensation for the sharp fall in locally
\ngenerated revenues.<\/p>\n
Central to the councilors' queries, voiced in a meeting with
\nofficials of the City Revenue Office, was whether the tax was
\nalready included in increases of fuel prices of up to 71 percent
\nannounced by the government early this week.<\/p>\n
\"If the answer is no, the City Council will strongly reject
\nthe tax idea as it will further burden the people who have been
\nseverely hit by skyrocketing prices in the current crisis,\" said
\nhead of the Golkar faction, Fatommy Asaari.<\/p>\n
Lukman Mokoginta, head of the Indonesian Democratic Party
\nfaction, said that the people were already burdened by the
\nmonetary turmoil, which has no clear resolution in sight, and
\nthere should not be further troubles added to their load.<\/p>\n
Representatives of the Armed Forces and the United Development
\nParty factions concurred.<\/p>\n
The introduction of the fuel tax was originally designed to
\ncompensate for a downturn in revenues from the enactment of Law
\nNo. 18\/1997 on the collection of local taxes and levies starting
\nMay 23.<\/p>\n
Based on the law, the number of local taxes will be cut from
\n42 categories to only nine, and the number of levies from 192
\ncategories to 30.<\/p>\n
Jakarta administration revenues are currently derived from 13
\ndifferent taxes and 44 different levies.<\/p>\n
Fatommy said that the Golkar faction would only go ahead with
\nthe deliberation of a bylaw on the fuel tax if the tax was part
\nof the fuel tax increases.<\/p>\n
\"The social cost will be higher if people should pay more for
\nthe tax. You can see now their negative reaction toward the fuel
\nprice increases.<\/p>\n
\"Can you imagine what their next reaction would be if they
\nwere asked to pay the tax?\"<\/p>\n
The Armed Forces faction chairman, Sumekar K.W., said that the
\nfaction chose to postpone the deliberation until \"everything is
\nall right\".<\/p>\n
Head of the City Revenue Agency Wahab Rachmatsjah refused to
\ncomment on the council's action.<\/p>\n
The government increased fuel prices this week by between 25
\npercent and 71.43 percent, and electricity tariffs by 20 percent
\nto reduce subsidies and curb the state budget deficit.<\/p>\n
The price of kerosene, the fuel most widely used by low-income
\nfamilies, experienced the smallest increase of 25 percent to Rp
\n350 per liter. The price of gasoline increased by more than 71
\npercent to Rp 1,200. (ind)<\/p>",
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