Council seeks abolition of ineffective taxes

Council seeks abolition of ineffective taxes

JAKARTA (JP): City Council Commission C for city revenue has
suggested that four taxes which are no longer effective in
contributing revenue to the city should be eliminated.

Helmy AR Syihab, chief of the commission, said yesterday the
administrative costs of collecting the taxes is much more than
the taxes themselves. Helmy was referring to the taxes on the
operation and ownership of small boats, taxes on nonmotorized
vehicles, dog tax and taxes on animal slaughter.

The city administration's revenue largely depends on 14 taxes
and 44 types of fees, he said.

Helmy's suggestion was prompted by an earlier statement by Tax
Director General Fuad Bawazier, who said in a hearing with the
House of Representatives that a number of fees and taxes imposed
by provinces and regencies would be annulled.

Fuad did not go into detail, but said it was part of
preparations for a new bill on regional taxes. The bill, he said,
will set standards to avoid unnecessary fees and taxes.

Fuad assured that the taxes and fees to be dropped would not
hurt provincial and regency revenues.

The city administration's revenue targets for this fiscal year
is Rp 550,000 in nonmotorized-vehicle tax; Rp 25 million (US$10.7
million) in taxes on small boats ; Rp 20 million in ownership
fees of small boats; Rp 31 million in dog taxes and Rp 160
million in slaughter taxes.

"The target has not been changed in the last four fiscal
years," Helmy said of the animal slaughter tax.

The city's revenue office delegates the collection of dog
taxes to subdistrict officials.

"Often when an official goes to collect the tax he is met by
either the dog or the maid. The owner never comes out, and
sometimes the dogs are quite frightening," Helmy said with a
laugh.

Taxes on nonmotorized vehicles, based on a 1971 city rule,
should be annulled because this means carts and horse-pulled
carriages, he said.

Rare

If the objects being taxed have become rare, he said, the rule
should be annulled.

"Actually there is a city team in charge of evaluating which
rules are ineffective," Helmy said. However, team members often
say it is better to still try to collect the taxes.

As for taxes for the operation of small boats and ownership
fees, "such as the many boats along the Marina port in Ancol",
Helmy said the 1988 rule should be replaced by one which is based
on an owner's residence.

"Because the tax collection is not based on the owner's
residence, officials have a hard time catching up with them,"
Helmy said, given the high mobility of boat owners.

The city's largest income is from vehicle documents, which is
targeted at Rp 1.05 trillion this fiscal year. Food and beverage
tax ranks second with a target of Rp 230 billion, and billboard
taxes rank third at Rp 70 billion.

Apart from these taxes and fees, the eight city-owned
companies are targeted to pay a total of Rp 46.9 billion this
fiscal year. (anr)