A groundwater tax?
The city bylaw on a groundwater tax which was approved by the Jakarta administration on Wednesday has provoked concern and questions among the public. The promotion of the bylaw has apparently been inadequate.
As usual, controversial statements are made by officials following any new policy, and this issuance of the bylaw is no exception.
A councilor denied the imposition of taxes on groundwater and surface water constituted an effort to prevent overexploitation of groundwater, and said it had nothing to do with the city's revenues. Meanwhile, the administration says that imposing the groundwater tax is "an attempt to increase city revenues."
The bylaw has a double purpose. Curbing over-exploitation of groundwater for environmental reasons is of course a must, and increasing city revenues "by acceptable means" for the sake of development is no sin either. Why, then, should the councilor deny this?
Paragraph 8 of Article 1 of the new bylaw stipulates that the taxes will be imposed on individuals -- read: households -- or institutions that use groundwater and surface water, whatever their purpose. The amount of the tax, according to Paragraph 2 of Article 5 of the bylaw, will depend on the amount of water used, but, according to the bylaw, will range from a 20 percent levy on groundwater and 10 percent on surface water.
According to the previous bylaw No. 10/1998, groundwater is understood to mean water that is obtained from the beneath the ground's surface and includes water tapped from natural springs. Surface water is water obtained from the surface of the earth, including rivers and the sea.
So it is clear what groundwater and surface water are understood to mean, and who the targets of the bylaw are. And once the new bylaw becomes effective, the use of groundwater and surface water for any purpose, including for household use, will be subject to taxes. And yet, the explanation sheet of the bylaw says households are exempted. The sheet also says that only houses that are rented out and boarding houses that consume more than 50 cubic meters of groundwater per month will be subject to the tax.
However, Governor Sutiyoso says only industries and hotels that obtain groundwater from wells with depths of more than 100 meters will be taxed.
Given that the new bylaw will affect the public, the administration must give a clear and adequate explanation, and more detailed information on the groundwater tax, to avoid unnecessary confusion.
Overexploitation of groundwater in the capital city and its surrounding areas has caused obvious environmental damage, including land subsidence and seawater intrusion for more than 20 years. In 1998, then Jakarta governor Surjadi Soedirdja issued Bylaw No. 10 in an effort to curb the overexploitation of water. However, violations have continued, which implies the law is being poorly enforced.
A councilor from the Indonesian Democratic Party of Struggle says the use of groundwater by businesses has got out of hand despite Bylaw No. 10. The new bylaw is expected to supersede Bylaw No. 10/1998, and in the light of past experience, people's skepticism about its enforcement is understandable.
The imposition of taxes on groundwater is a prudent policy in terms of saving the environment from further damage, a measure which the government has in the past frequently ignored.
Unfortunately, all state-owned institutions and offices, including those of the Jakarta city administration, will be exempted, which is obviously unfair because state-owned facilities are no less prone to using groundwater excessively. Judging from the fact that groundwater is now a commercial commodity, taxes should also be imposed on state-owned institutions and companies so as to improve environmental awareness among the state officials.
Whatever the case, the new policy deserves the support of Jakarta's citizens because it could help to promote the use of tap water produced by the city-owned tap water company, PAM Jaya.
The bylaw says groundwater taxes will be higher for those living in areas reached by the tap water service. This is a good way to promote the use of tap water, but the problem which the decision makers must answer is that, so far, PAM Jaya has not provided adequate services to its customers. Therefore, the bylaw should also include a warning to PAM Jaya to improve its services.
So far, only 57 percent of some 8 million Jakarta residents enjoy PAM Jaya's services. The new bylaw deserves our support, but the administration must make sure the law is properly enforced and the taxes professionally administered. Otherwise "leakages" will occur and the public's money will go into the pockets of only a handful of people instead of the city coffers.