Company vehicles not subject to progressive tax

Company vehicles not subject to progressive tax

JAKARTA (JP): Operational cars owned by companies are not subject to the progressive car taxation system, which has been introduced as of April 1, a member of the City Council said yesterday.

Helmy AR Syihab, chairman of Commission C, which is in charge of financial affairs, told The Jakarta Post that the decision to exclude operational cars from the new taxation system was contained in the revised version of the progressive car taxation regulation.

City administration announced earlier, under the new regulation, that residents and companies who own more than one car, will have to pay tax at rates between 20 and 100 percent higher the previous car tax rates.

The regulation imposes the progressive tax rates on a family and its members (as stipulated in the resident family card) and on companies and other legal entities.

However, under its revised version the regulation is applied only on personal cars used to transport passengers and not on cars owned by companies, public transit vehicles and motorcycles, Wahab Rahmatsyah, chairman of the City Revenue Office, said.

The cars, which are subject to the new taxation system, are those owned by a family registered at one address, one family card and one taxpayer's registration number, he said.

Wahab urged people who have sold their cars not to lend their citizenship cards to the new owners to process the extension of the car's license plates. "Allowing the buyers to extend the license plates under the old names will cause them, the previous owners, to pay more for their second and third cars," he said.

The revised version of the regulation also changes the range of the additional tax rate payment to only between 20 and 60 percent from between 20 and 100 percent, he said.

The regulation, for example, requires motorists to pay 120 percent of the old car tax rate for a second car and rises to 140 percent for the third car and 160 percent for the fourth and subsequent cars.

The regulation, approved by City Council last July and by the Ministry of Home Affairs last February, is designed to increase municipal government revenue and to slow the growth in the number of private cars by promoting the use of public buses instead.

According to City Council's Commission C, the city's regional revenues, from the imposition of the regulation on over 126,890 cars owned by individuals in the city, will reach about Rp 5.2 billion (US$2.38 million) for the current 1995/1996 fiscal year.

Helmy said that the revenues could be higher than that because the number of cars in the capital keeps increasing. (yns)