Increase in property tax shocks many people

Rendi A. Witular, The Jakarta Post, Jakarta

The increase in land and building tax has shocked many people in Greater Jakarta since the directorate general of tax under the Ministry of Finance introduced the tax earlier this year.

Agus Dharmono, who lives in Puri Kembangan housing estate in West Jakarta, told The Jakarta Post on Monday at the West and Central Jakarta tax office on Jl. K.S. Tubun, Central Jakarta, that he only had to pay Rp 700,000 (US$70) in tax last year.

However, this year, without any notification or explanation, he had to pay Rp 2.2 million for his 400-square-meter plot of land and 150-square-meter bungalow. The figure is an increase of 300 percent on his old tax fee.

"It's irrational. My house is not luxurious and I built it in 1985. My neighbor, who has a luxury two-story house, only has to pay Rp 1.4 million this year. It's not fair and I refuse to pay unless I get a rational explanation on the enormous tax hike," he grumbled.

Later in the day, Agus met the office's head of assessment division, Heru Narwanta, who claimed that the big increase in tax could have been caused by wrong calculations made by his subordinates. Another cause is possibly the zone his house is located in, which has experienced a hike based on a new regulation from the directorate general.

"All I can do now is compile all the complaints and investigate the causes of these individual tax hikes," he said.

Rahardi, another taxpayer living on Jl. Kembangan in Kembangan Selatan subdistrict, West Jakarta, was also shocked that he was asked to pay Rp 2 million compared with last year's Rp 900,000 for his 1,000-square-meter plot of land.

"I had intended to pay my tax last Friday but I was shocked when I saw the figure. I submitted a complaint (to the office) and they promised to give an explanation today," he said.

"They claimed the figure was caused by an inaccurate assessment, because they didn't deploy officers to visit the site. They just made up the number."

Rahardi was taxed far higher than the market price as stated by Kembangan Selatan subdistrict secretary Endan Suharman. He said the price of land in the area ranged between Rp 500,000 and Rp 800,000 per square meter.

Rahardi's plot of land should have been estimated at a maximum of Rp 800 million. But the tax bill states his land was worth Rp 1 billion.

To his disappointment, he was asked to return to the office on Wednesday as they were still investigating possible errors.

The government estimates the value of a piece of land and a building at 80 percent of its market value. Each taxpayer is then obliged to pay 0.5 percent of the sale value for tax (NJKP), which is between 20 percent (for land and buildings valued below Rp 1 billion) and 40 percent (for land and buildings valued over Rp 1 billion) of the government estimate.

Unfortunately, both Agus' and Rahardi's land had been "promoted", being assessed at over Rp 1 billion, making their taxes much higher than in previous years.