City wants to impose tax on owners of more than one cars
Damar Harsanto, The Jakarta Post, Jakarta
The city administration is drawing up plans to introduce a progressive tax system for cars and motorcycles as part of efforts to cut fuel consumption and save energy.
Under the system, which is expected to come into effect this year, families or individuals owning two or more cars or motorcycles would pay higher taxes on their vehicles.
"We are running simulations of the new vehicle tax system. It is likely that we will implement this new policy this year," City Revenue Agency head Agusman Badarudin said at City Hall on Wednesday.
Agusman said the new system would only target private cars and motorcycles and not public transportation owners.
"We are studying whether the system will be based on data from family cards or identity cards," he said.
He said earlier simulations were based on ownership of motorized vehicles, either cars or motorcycles, and further divided into ownership of luxury or non-luxury vehicle.
"Residents owning one car and a motorcycle, for instance, would not be subject to the new taxes. But should he/she add another car or motorcycle, then he/she would have to pay the new taxes," he said.
Vehicles are classified as luxury or non-luxury based on the engine capacity of the vehicles.
In the simulations, the agency classified motorcycles with an engine capacity of 500 cubic centimeters or more, gasoline-fueled cars with 1,800 cc engines or higher and diesel-fueled cars or vans with 2,500 cc engines or higher as luxury vehicles subject to higher taxes.
He said the tax levels would also refer to the latest sales value of motorized vehicle (NJKB).
"We propose that the average vehicle tax be set at 25 percent of the NJKB ... but the final say will be in the hands of the City Council," he said.
The idea of a progressive tax has been proposed by the central government to provincial administrations as part of nationwide energy-conservation measures.
The administration believes higher vehicle taxes will discourage people from owning and using private cars, and encourage them to switch to public transportation.
However, the chairman of City Transportation Council, Soetanto Soehodho, said the administration should improve public transportation before pressing forward with the implementation of the progressive tax system.
"I doubt it will be effective ... I prefer the administration specifically targets luxury cars, for instance, those with 3,000 cc engines or higher ...," Soetanto told The Jakarta Post.
He said the administration must ensure the money collected from the taxes go to finance the development of public transportation in the city.
Alex Yuniarto, a resident of Cawang, East Jakarta, who has six cars at home, said he might have to sell some of his cars if the new taxes are implemented.
"What? Twenty-five percent of the NJKB? The taxes I would have to pay would be very high. I prefer just to have one at home," he said.