Council ratifies bill on annual foreigners tax

Council ratifies bill on annual foreigners tax

JAKARTA (JP): A new bill authorizing the city to increase
foreigners' annual tax by an average of 500 percent was passed
yesterday.

When the bill becomes effective, it is expected to bring in at
least Rp 17.62 billion (US$74.50 million) as revenue from taxes
on about 45,800 expatriates living here, the ABRI faction,
chaired by Nawadji, said yesterday in the council meeting.

The bill will become law after the approval from the home
affairs ministry is obtained.

Governor Surjadi Soedirdja, represented by Deputy Governor for
Economic and Development Affairs Tb. M. Rais, assured that the
tax increase will be accompanied by a commitment to improve
services to foreigners who stay or live in Greater Jakarta
"because the image of the city is at stake."

Council Speaker M.H. Ritonga said that with more and more
expatriates expected, it is "natural" to increase their taxes
from the rates ruled by a 1989 regulation.

The average increase of 500 percent takes into account the
higher salaries received by expatriates and the need to adjust
the value of the rupiah, Ritonga said.

Those subject to the tax are foreigners staying here for more
than 90 days. Those not subject includes foreigners involved in
social and religious work.

In its address, the Golkar faction said it supported the bill
as it gives a "sense of justice" to local employees who may have
abilities similar to expatriates.

However the faction, represented by Soegijo, urged local
employees to improve their work ethos and skills to face
increasing competition in the upcoming free trade era.

The increase is also expected to prevent the employment of
low-paid immigrants for work that can be done by locals, the
commission A in charge of governmental affairs noted.

Tax charged to the head of a family is increased from
Rp 90,000 to Rp 450,000, while that on the spouse is increased
from Rp 60,000 to Rp 300,000.

The first and second child are subject to increased taxes from
Rp 30,000 to Rp 150,000. The third child and other family members
are subject to Rp 300,000 each in annual tax.

Electricity

Also passed yesterday was a bill imposing taxes on electricity
consumers using generators with over 60 KVA (kilo-volt-amperes)
in installed capacity. The taxes from the generator-users, who
must now have permits, are expected to bring in an annual revenue
of about Rp 9 billion from a recorded 1,300 consumers among
hoteliers, restaurant and factory owners and office managements.

The bigger the installed capacity and higher the power (KWH)
used, the higher will be the tax.

The tax, Ritonga said, is aimed at consumers who have
benefited from street lights using generators, as so far, only
domestic consumers have been paying the three percent tax in
bills.

Responding to councillors' suggestions that the revenue be
used to install street lights in slums, Deputy Governor Rais
welcomed the idea.

"But we should note that out of Rp 56 billion spent each year
on installing more lights and maintenance, Rp 15 billion goes for
payment of electricity bills," he said.

Installing lights in slums also involves coordination with the
state-owned electricity company in constructing the power house,
he added.

Golkar also suggested that the city-owned Bank DKI could
collect the taxes on generator-users. Rais said it is not
possible for private parties to collect the taxes as only the
administration is authorized to do so. (anr)