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)