City administration plans tax increase on luxury cars

JAKARTA (JP): The city administration and Jakarta Police are working out details of tax increases for luxurious imported cars with no local content.

No details were given on the percentage increase or when the new taxes would be applied as city officials said that the tax scheme was still being calculated.

The decision to increase various vehicle taxes looks to be an attempt by the city administration to build on the tremendous windfall they achieved this year.

Vehicle taxes have become the largest contributor to city revenues, providing about a quarter of the Rp 4.05 trillion revenues in the 2000 budget.

Governor Sutiyoso, after officially opening the Vehicles Document Services Office at Jl. Daan Mogot, West Jakarta, on Friday said: "It is only logical that those who can afford to purchase luxury cars pay more taxes."

In the future, the city will no longer issue temporary registration numbers, identified by the white license plates.

Such temporary license plate numbers, are issued by the vehicle document services office while motorists process their vehicle documents.

"We plan to stop issuing temporary vehicle registrations because they provide cars owners with the opportunity to avoid paying their vehicle tax," Sutiyoso added.

While substantial earnings were achieved from vehicle taxes, Sutiyoso said the city administration and police would continue to crack down on anyone violating vehicle tax rules.

"All violators will be punished, including officials that try to misappropriate tax revenues. We will take stern measures because sometimes in the past revenues have gone into certain officials' pockets," Sutiyoso said.

Jakarta Police Chief Insp. Gen. Mulyono Sulaiman said the police would support efforts by the city administration to control the vehicle registration process.

"I have ordered my subordinates to arrest anyone, including officials, who violates the rules in the vehicle registration process," Mulyono added.

The city administration was pleasantly surprised when it discovered it had raked in an unexpected surplus of Rp 669.7 billion (US$77 million) in the current budget term.

Revenues collected from fees on changing vehicle ownership registration rose by 97 percent or Rp 290.69 billion, while vehicle tax revenue rose by 10 percent or some Rp 35.88 billion.

Even before the new tax rates are imposed, the city administration estimates revenues of some Rp 1 trillion in financial year 2001 from some 1.9 million vehicles in the capital.

The increase is attributed to increased revenues from vehicle taxes, especially from luxury and imported cars.

The government revoked in June its policy of prohibiting the import of completely built-up (CBU) vehicles and luxury vehicles that seat fewer than 10 people.

The ban was also lifted on imported automobiles which have engine capacities up to 4,000 cc and a price of more than US$40,000. (dja)