Governor defends tax increase

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.