Governor supports new taxes to subsidize subway
Governor supports new taxes to subsidize subway
JAKARTA (JP): Governor Surjadi Soedirdja says that imposing
various new taxes on residents will help keep subway fares low.
Along with the taxes, the city will use public funds to
finance the project. "In this way the subway fares can be set as
low as possible," Surjadi said yesterday.
An executive of the subway project's management unit, Slamet
Sularno, said over the weekend that reactivating lapsed tax
regulations, including fuel, street, streetlight, and employee
levies, could help finance the construction of the planned 14.5
kilometer subway system from Blok M to Kota. Congestion pricing
was also cited as a possible source of funding for the project.
The parties which gain from the subway system deserve to help
the project, the governor said yesterday.
An employee tax might also be imposed on companies located
along the corridor because they are benefiting from the facility
and congestion pricing will be imposed on vehicles which use the
roads running parallel to the tracks, Surjadi said. "This is a
cross-subsidy formulation."
However, Surjadi said some of the proposals, such as imposing
a fuel tax, need approval from the government and the House of
Representatives, and the city administration will not implement
them without the proper approval.
"We don't know if the central government and the House of
Representatives will approve the proposal but I think it is worth
implementing the tax because it may discourage people from using
private cars," he said.
Surjadi explained that the subway would eventually decrease
pollution in Jakarta and save the country's oil stock.
A one-way fare on the subway is expected to be set at Rp 1,800
(78 US cents) per person.
The subway project's management unit, which is responsible for
forming the subway's basic design, has reported that the city's
current revenue, it was Rp 2.1 trillion in the 1995/1996 fiscal
year, is not adequate to finance the project and the only way to
cover the shortfall is by enforcing new taxes to increase the
revenue.
The management unit estimated the city will receive Rp 868,8
billion from the new taxes.
The 14.5 kilometer, $1.5 billion, subway will link Blok M in
South Jakarta and Kota in West Jakarta. Construction is due to
begin in 1997.
Recent research found that gasoline worth $1.5 million is
wasted every year by vehicles trapped in the congestion along Jl.
MH. Thamrin and Jl. Jend. Sudirman.
The project's management unit plan to implement the fund-
raising schemes gradually, beginning with the congestion-pricing
scheme in July next year.
The project's management unit admitted that the traffic along
the route will be bad during the construction works and said not
using one's vehicle will be the only way to avoid it. (yns)