City to target Rp 550b in vehicle tax: Sutiyoso

City to target Rp 550b in vehicle tax: Sutiyoso

JAKARTA (JP): With a projected Rp 550 billion (US$78.5
million) income from motor vehicle taxes for the current
1999/2000 fiscal year, governor Sutiyoso vowed on Friday to seek
taxes on imported luxury cars and motorcycles.

"Big motorcycles and luxurious cars, mostly owned by rich
people, should now be properly taxed," Sutiyoso said on the
sidelines of an inspection into the city's vehicle document
service office (Samsat) on Jl. D.I. Pandjaitan in East Jakarta.

"We have to correct all past wrongdoings in vehicle taxation,"
he said.

The governor ordered his officials to take every effort to
make owners of the luxury cars and big motorcycles pay their
taxes.

He said there have been significant increases in transactions
of luxury cars and big motorcycles, but that the owners were
reluctant to pay taxes for the transfer of the vehicle's
ownership.

Samsat officials were reluctant to comment on the vehicle
taxation procedures.

Head of the city's revenue office Deden Supriadi was unable to
provide details on the number of luxury cars and big motorcycles
in the city.

"Lots," was his response.

The number of big motorcycles, such as Harley Davidsons, and
luxury cars, are believed to have significantly increased in the
past year. But owners have reportedly evaded paying the taxes,
which amounted to 10 percent of the vehicle price.

The owners reportedly paid off Samsat officials to avoid
paying the taxes and to secure vehicle documents.

Commenting on the low figure for taxes from the luxury
vehicles, head of the city council's commission C for financial
affairs Amarullah Asbah suggested the city administration lower
the tax.

"It's better to lower the tax than to allow owners of the
luxury vehicles to not pay at all," Amarullah said on Friday.

He said many luxury vehicle owners had urged the
administration to lower the tax to between three and five
percent.

Amarullah said the city administration should propose the move
to the council if it planned to lower the tax.

He however agreed that lowering the taxes on luxury cars and
motorcycles would create jealousy among ordinary people because
they had to pay a 10 percent tax for their vehicles.

"It's a dilemma. Owners of the luxury vehicles could probably
pay the taxes in installments," he said.

Amarullah said the vehicle taxes are a major source of income
for the city because they contributed 25 percent of the city's
revenue.

He said that up to October the administration had secured 46
percent of the targeted Rp 600 billion of vehicle taxes. (jun)