Increase in property tax shocks many people

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.