City ponders tax on rented room income

City ponders tax on rented room income

JAKARTA (JP): The city administration is working out the
details of a tax on rented rooms as part of its effort to
increase revenue, an official said on Thursday.

The head of the Jakarta Revenue Agency, Deden Supriadi, said
the tax scheme was being calculated based on the current
guidelines applied to hotels.

"Each rented room operator with a minimum of 14 rooms is
likely going to be required to pay a 10 percent tax," said Deden,
who declined to go into detail.

In the wake of regional autonomy, which took effect on Jan. 1,
local governments are empowered to seek new sources of revenue.

The city budget for 2001 projects almost half of total revenue
coming from taxes imposed on, among other things, the transfer of
vehicle ownership and vehicle ownership taxes.

Deden hinted that the tax on rented rooms would be based
mainly on the monthly turnover of proprietors, and also would
determine the standard requirements of rented rooms subject to
the tax.

"We are still formulating the standard size of the room,
facilities and services provided by the proprietors, and also any
possible conditions covered by the ruling," said Deden after a
hearing with the City Council.

Deden said the new tax scheme would be submitted for approval
to the City Council, which will have to change the current City
Bylaw No. 18/1997 on regional taxes and contribution.

The bylaw, which includes a ruling on taxes for hotels and
restaurants, applies a 10 percent tax for each transaction or
service provided to guests.

"The new scheme may be divided into tax brackets, considering
the various conditions of the occupants who rent the rooms,"
Deded said.

Rented rooms are a peculiar phenomenon in the capital,
particularly in areas around campuses and industrial estates,
with students and workers seeking easy access to their places of
study and work.

Monthly room charges generally vary between Rp 120,000 and Rp
350,000 (between US$12.60 and $36.80), including water and
electricity. The tenants have to pay another Rp 30,000 for
laundry and other facilities such as air-conditioning and
television.

The size of the rooms range from nine square meters to 25
square meters, but most are equipped with a bed, table, chair and
wardrobe. Some places offer private bathrooms, while others
provide at least two bathrooms to be shared by occupants. (07)