Jakarta raises vehicle taxes by 50 percent
Ahmad Junaidi, The Jakarta Post, Jakarta
Without involving the public, the Jakarta administration decided on Friday to increase annual vehicle taxes from 1 percent to 1.5 percent of the vehicles' value.
The City Revenue Agency head Deden Supriadi claimed that the increase was made to adjust to similar taxes which were applied across the country.
"We want to apply the same amount of tax as other cities in the country. The tax increase will go into effect on Monday," Deden told reporters at the City Hall.
He said public transportation vehicles, which were produced in 2001 and before, will be allowed to pay the same tax as last year, one percent.
He added that the public transportation vehicles (bus, minivans, taxis), which were produced this year or earlier, would receive a 20 percent tax discount.
The agency set the sales value of vehicles at 80 percent of their market price. For example, the owner of a 1996 minivan with a market price of Rp 100 million should pay tax of 1.5 percent of Rp 80 million or Rp 1.2 million.
Many car owners who live in Tangerang, reportedly registered their cars in Jakarta since the city applied lower taxes than Tangerang.
Jakarta currently has 3.8 million vehicles and motorcycles.
The vehicle tax income represents 80 percent of the city's provincial tax revenue, while entertainment, hotel and restaurant tax contributes 10 percent and other taxes and levies such as advertising tax makes up the balance.
The provincial tax revenue represents about 50 percent of the city's total income, while the balance it receives from the central government which collects what it calls sharing taxes in the city, such as income and land taxes.
The city's provincial taxes revenues and the sharing taxes collected by the central government were expected to reach Rp 9.7 trillion this year.
Separately, the Indonesian Consumers Foundation's (YLKI) legal and consumer complaint division head, Tulus Abadi, deplored the administration for unilaterally increasing the vehicle tax without listening to the people's wishes.
"We urge the administration to delay the tax increase until it is discussed with the public," Tulus told The Jakarta Post on Friday.
He suggested that before a policy was decided upon that directly affects the public, such as tax, water rates and bus fares, the city administration should heed the public's aspirations.
He claimed that vehicle taxes were not only applied to rich people, but also ordinary people here, so the administration should consider people's financial ability.
"The administration invited YLKI in other issue such as bus fares, but not the vehicle tax this time," Tulus revealed.
He said the reasons why the tax was increased by 50 percent was still unclear to the public.
He said the administration's arbitrary decision was a poor precedent for regional autonomy.
"The tax, of course, aimed to increase the city's revenue in the budget. But people often question the transparency of the budget spending," he added.