Governor defends tax increase

The Jakarta Post, Jakarta

Undeterred by public complaints, Jakarta Governor Sutiyoso firmly refused on Monday to revoke his decree which raises vehicle tax from 1 percent to 1.5 percent of the vehicles' value.

"It cannot be reviewed since we just followed the Ministry of Home Affairs' decree," Sutiyoso told reporters at City Hall.

Although the details were never discussed, the governor claimed that the issue had been generally addressed in earlier meetings with the City Council.

Separately, Deputy Governor Fauzi Bowo also supported Sutiyoso's statement, saying that not all issues should be discussed with the council.

"So, who is the executive (branch of government)? Why should we discuss it with the council?" Fauzi told reporters.

The decree on the tax increase was announced by the City Revenue Agency on Friday.

The agency values a vehicle at 80 percent of the market price. For a van with a market price of Rp 100 million, the owner should pay 1.5 percent of Rp 80 million or Rp 1.2 million.

The administration aims to secure Rp 2.5 trillion from vehicle tax this year, which will contribute Rp 9.7 trillion to the city budget.

The gubernatorial decree was based on the ministerial decree 11/2002 on the calculation of vehicle taxes which is applied across the country.

The decree, which became effective on Monday, gives a 20 percent discount for public transportation vehicles manufactured this year or in 2001, while the tax for the old public transportation vehicles would remain the same.

Jakarta has 3.8 million registered vehicles and motorcycles.

The Indonesian Consumers Foundation (YLKI) and the City Council expressed regret that the administration announced the decree before discussing it with the public or the council.

They urged the administration to postpone the application of the decree until it is discussed and agreed upon, especially due to the amount of the increase.

They also claimed that they had never been invited by the administration to discuss the issue, as was the case with other issues, such as public transportation fares and tap water charges.

Residents also complained about the increase, saying that it would be a burden due to the increasing cost of living.