A groundwater tax?

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.