Between ID Cards and Vehicle Taxes: The Never-Ending Policy Tangle

Vehicle motor taxes in Indonesia serve as a stark example of how a policy involving multiple institutions becomes captive to fragmented authority. Amid advancements in digital services, where various public obligations can be settled online, there remain public services frequently complained about by the public. Vehicle tax payments still leave fundamental issues, namely the lack of synchronisation between the vehicle owner’s identity and the tax payer. Ironically, this situation affects millions of used vehicles in Indonesia each year. This problem appears simple but has broad impacts. In practice, taxpayers are often still required to present the original owner’s ID card, especially for used vehicles. Here, the promised ease of service turns into an administrative burden. Often, vehicle ownership transfers occur without administrative changes. The reason is clear: additional costs and time in the name transfer process. Thus, the issue is not about technology, but a policy design that is not yet integrated. For local governments, the existence of Motor Vehicle Tax (PKB) and Motor Vehicle Name Transfer Fee (BBNKB) is one of the main sources of Original Local Revenue (PAD). In several regions with dense motor vehicle populations, its contribution can exceed 30 percent of PAD. This dependency makes the vehicle tax sector “too important to fail” for regional finances. In the era of reduced transfers to regions from the central government, local governments tend to rely on intensifying vehicle taxes to maintain fiscal health in their respective Regional Budgets (APBD). The looser the rules, the higher the potential revenue, but it correlates with further deviation from administrative order. However, such efforts do not always run smoothly. Conflicts of interest arise in tax collection when the vehicle owner’s name does not match the one listed in the Vehicle Ownership Certificate (BPKB) and Vehicle Registration Certificate (STNK). As a result, local governments face a dilemma between maintaining administrative compliance and securing revenue. Not a few then take shortcuts by allowing tax payments without the original owner’s ID. Unfortunately, this approach only addresses symptoms, not the root problem. If examined deeper, this tangle essentially stems from differing perspectives of three main actors. Local governments focus on optimising tax revenue— as long as the tax enters the regional coffers, identity issues are not a primary concern. Taxpayers desire a simple, quick process that can be accessed digitally without administrative hurdles. Meanwhile, the police have different interests: maintaining vehicle ownership legality while meeting Non-Tax State Revenue (PNBP) targets, particularly from BPKB and STNK issuance. From the police perspective, identity discrepancies are not merely administrative matters, but PNBP objects. Thus, the offered solutions tend to be normative, namely the motor vehicle name transfer process. Here, conflicts of interest become evident when the drive for service simplification clashes with the need to maintain legality and state revenue. This issue grows more complex due to fragmented policy design. Local governments do have the authority to provide incentives in the form of BBNKB exemptions. However, the name transfer process is never truly free. PNBP fees for STNK and BPKB issuance must still be paid because they fall under central authority through the police. Thus, regional incentives do not fully eliminate the public’s burden. At the same time, Indonesia has entered the era of a single identity through the Population Identification Number (NIK). Logically, vehicle management systems should transform accordingly based on this foundation. However, current practices still retain the old approach linking vehicle ownership to administrative domicile. Conceptually, this is the basis for data integration. But its implementation has not fully followed that direction. This approach becomes increasingly irrelevant amid rising public mobility. The current productive generation is no longer tied to one area; they live nomadically. Many individuals work in different regions without changing their ID card addresses, either due to administrative or economic considerations. For example, a worker in Jakarta may not want to move their ID from their home region. This reality implies that the obligation to register vehicles according to domicile becomes maladaptive to social realities. Looking ahead, this challenge will become more pronounced with the arrival of tax data integration through systems like Coretax. Modern taxation approaches are no longer solely income-based but also consider consumption patterns and asset ownership. Motor vehicle data (if integrated based on NIK) can become an important instrument for mapping taxpayer economic profiles more accurately. In simple terms, the state is beginning to see what is owned and spent, not just what is reported. If in the past individuals could have more than one ID card, now that is impossible. The unresolved issue of vehicle ownership creates opportunities for asset concealment through using others’ names in motor vehicle registrations. This becomes a loophole that the government must address immediately. If left unchecked, this loophole has the potential to erode the tax base broadly. Unfortunately, as long as vehicle management remains fragmented by administrative boundaries and institutional authority, realising such integration potential is difficult. Policy