Council gives OK to groundwater tax

Council gives OK to groundwater tax

Damar Harsanto, The Jakarta Post, Jakarta

Amid mounting concern over environmental problems resulting from
the overuse of groundwater, the City Council agreed on Wednesday
to pass a groundwater tax bylaw.

"The council accepts the draft (of the bylaw) as it is part of
efforts to curb environmental damage from groundwater
overexploitation, not an effort to increase city revenue," said
council head Agung Imam Sumanto during Wednesday's session to
hear from all factions on the bylaw.

Councillor Dadang Hamdani of the Indonesian Democratic Party
of Struggle (PDI-P), reading his faction's statement, said the
use of groundwater by businesses -- including hotels, offices,
malls, apartments and industrial companies -- had gotten "out of
hand" and "lacked control and monitoring".

Environmentalists have blamed the overexploitation of
groundwater for much of the environmental damage in the capital,
including land subsidence and seawater intrusion.

The PDI-P faction cited a gubernatorial decree that states
that all buildings being serviced by city tap water operator PD
PAM Jaya must only use groundwater as a backup.

The National Mandate Party (PAN) faction said residents
preferred to use groundwater rather than tap water because PD PAM
Jaya and its foreign partners failed to provide clean water to
customers.

"The tap water supply only covers 57 percent of the need of
the city's eight million residents," said PAN faction member Haim
Mahadin.

The new bylaw, which will replace Bylaw No. 10/1998, maintains
the groundwater tax at 20 percent but imposes a lower tax of 10
percent on surface water. The old bylaw stipulated that both the
groundwater and surface water taxes were 20 percent.

The groundwater tax will be determined by water table
measures, location of the water and whether the area is also
served by the city's tap water operator.

Rental houses and boarding houses that use more than 50 cubic
meters of groundwater per month will also be subject to the tax.

Groundwater used by private households, places of worship,
farms and fish farms will be excluded from the tax.

Several factions warned the administration that it must
improve its control and monitoring to ensure the tax is properly
administered.

"It is not easy to impose a tax (on groundwater), since we
have found the rampant bribery of officials by taxpayers," the
United Development Party (PPP) faction said.

The PAN faction said this bribery had cut into the city
revenue.

"The administration must find solutions to reduce such
practices. It can, for instance, order different officers to
cross-check tax amounts, or by periodically rotating the
officers," it said.

The administration has targeted an increase of 16 percent in
tax revenue from groundwater and surface water, from Rp 48.6
billion last year to Rp 56 billion in 2004.