Facts about RI property tax

I would like to refer to Dadan Wijaksana's article in The Jakarta Post on July 18, 2003, entitled Local taxes don't spook investors.

In his article it stated that "at present, a regency only gets 64 percent of the land and building tax revenue generated within it, with the rest going to the provincial administration and Jakarta".

If the underlined word in the end of the sentence, Jakarta, refers to central government then there is a misconception about the share-out of the land and building tax revenue between central government and provincial/local government.

According to government Regulation No. 16/2000 dated March 10, 2000, about distribution of the Land and Building Tax Revenues between central government and provincial/local government, in chapter 3 article 1 and 3 we could summarize that the 10 percent shares of the tax revenue belongs to the central government and it will be distributed to local government (not provincial government). Also, the allocation of the central government's shares are distributed evenly to all local governments and the remaining 35 percent are distributed as incentives to all local governments whose realizations of the land and building tax revenue for the last budget year exceeded the target.

We can conclude that basically the central government's shares on the land and building tax revenue are shared out for all the local governments (Pemda Tk. II). In the end, "Jakarta" would never get shares from these taxes.

TOGIHON TAMBUNAN Pontianak, West Kalimantan