Taxing extra cars<\/p>\n
Days after it was announced that the Jakarta city
\nadministration was planning to introduce a progressive tax system
\nfor cars, the news remains a topic of conversation among vehicle
\nowners in this capital city. The reason is of course obvious. For
\nmany of Jakarta's families owning more than one car has since
\nlong stopped being a luxury.<\/p>\n
One argument that is often heard is that at present,
\nrelatively few families remain in which the husband or father is
\nthe sole breadwinner. The number of working women is considerable
\nand is likely to continue to increase in the future, not only to
\nmake it possible for families to make ends meet, but because
\nmany, or perhaps most, modern Indonesian women find their self-
\nfulfillment in working and putting their talents to productive
\nuse.<\/p>\n
With two (or more) members of the family working, and usually
\nin different places, the need for more than one car is
\njustifiable, or so the argument goes -- not to speak of the
\nchildren, who have to go to school.<\/p>\n
On the other side of the issue, there can be no doubting the
\ngood intentions of the authorities who devised the plan. In
\ngeneral terms, greater fairness is indeed the objective of any
\nprogressive tax system. City councilors have made it clear that
\nthe progressive car tax plan is intended to diversify and
\nincrease the city's revenues and to ensure a more equitable
\ndistribution of wealth among the city's residents.<\/p>\n
The bill, which was approved earlier this week, will bring
\nthe new system into effect later this year. According to the new
\nlegislation, motorists will have to pay 120 percent of effective
\ntax levels for a second car, 140 percent for a third, 160 percent
\nfor a fourth, 180 percent for a fifth and finally 200 percent for
\nany number of cars exceeding five.<\/p>\n
A City Council spokesman, Zakiruddin Djamin, said that with
\nthe progressive tax system, the city's revenues were likely to
\nincrease by just under three percent a year to reach the
\nequivalent of US$2.42 million a year.<\/p>\n
Thus it seems that both the proponents and the critics of the
\nplan have valid arguments for and against the new system,
\nrespectively. Obviously, in its execution, the new progressive
\ntax system is likely to meet with snags and problems, especially
\nin the initial stages. Such details of execution can probably be
\nworked out gradually during the execution.<\/p>\n
What may be of greater relevance, it seems to us, is to look
\nat some of the reasons why so many Jakartans find it expedient to
\nown more than one car. Cars are among the most expensive items
\nfor families to own in Indonesia.<\/p>\n
As has often enough been pointed out, the sad state of the
\npublic transportation system in Jakarta is blamed for much of the
\nills that beset this city's traffic. And a major cause, of
\ncourse, is the seemingly uncontrolled proliferation of privately-
\nowned vehicles as compared to public transit vehicles. Owning
\nmore than one car obviously aggravates the problem. But if
\ndiscouraging ownership of more than one car is an objective, a
\nprogressive taxation system alone may not solve the problem.<\/p>\n
Perhaps it may help to reserve part of the revenue derived
\nfrom the new system to finance the improvement of this city's
\npublic transit system. If necessary, the city administration
\ncould also think of lowering the taxes imposed on bus companies
\nso that more money can be made available for improvements. In any
\ncase, we believe that it will be worthwhile to look at the core
\nof the problem and try to find an overall solution that benefits
\nboth the administration and Jakarta's citizens.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/taxing-extra-cars-1447893297",
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"sponsor": "Okusi Associates",
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