Facts about RI property tax

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