Jakarta's 2003 budget to add burden to residents

Jakarta's 2003 budget to add burden to residents

Bambang Nurbianto, The Jakarta Post, Jakarta

Jakarta residents will have to shoulder more of a burden in 2003
as the 10.37 percent increase of the 2003 City Budget from Rp 9.7
trillion in 2002 to nearly Rp 11 trillion next year will strongly
rely on taxes and other fees.

The draft of the 2003 City Budget expected to be discussed by
the city administration and City Council this week shows that
nearly all of the Rp 8.72 trillion of next year's city income
will come from taxes and fees.

Therefore, targets of taxes to be collected by both the city
administration and the central government will be increased in
almost all sectors.

Targets of revenue from 10 tax components imposed by the city
administration, for example, will increase from Rp 3.18 trillion
in 2002 to Rp 3.87 trillion in 2003 or around a 21.6 percent
increase.

The taxes will be collected from vehicle purchases, ownership
transfer of vehicles, fuel use, hotels, restaurants,
advertisements, entertainment, street illumination, ground water
use and off-street parking.

Vehicle owners will be hardest hit next year by the taxes as
expected vehicle tax revenues as a whole are set to increase by
35.04 percent from Rp 893 billion in 2002 to Rp 1.206 trillion
next year.

In addition, transfers of vehicle ownership, which a total
budget line of Rp 1.405 trillion in 2002 will go up to Rp 1.53
trillion next year, a hike of over 9.13 percent.

Other significant increases include the ones on fuel taxes
(34.62 percent), entertainment tax (33.36 percent), street
illumination (31.68 percent), hotel tax (22.59 percent), and
underground water use tax (20 percent).

The city is also set to increase revenue from taxes managed by
the central government including land and property taxes,
property transfer of ownership and income taxes.

From these tax earnings, the city expects to reap around Rp
3.1 trillion, an increase of 12.01 percent from last year.

All the increases are expected to take place amid uncertain
economic conditions here.

Despite the gloomy economic prospects from most analysts, the
draft of the city budget assumes a very ambitious macro-economic
growth target of 4.62 percent; while the rupiah rate against U.S.
dollar is targeted at 9,200 as an average for the year and
inflation rate is set at 9 percent.

The draft also has an increase 14.81 percent in revenue from
22 other line items, from Rp 283.2 billion in 2002 to Rp 325.1
billion in 2003.

On the other hand, revenue from companies and assets which are
under the control of the city administration will still not
contribute a significant share to the budget. The revenue is
expected to be at around Rp 67.3 billion from the total budget of
Rp 11 trillion.

Data from the City Revenue Agency shows that there are 28
city-owned firms with assets totalling tens of trillions rupiah.

In the 2002 City Budget, the contribution of the companies and
assets was set at only Rp 64.9 billion. Those companies, however,
failed to achieve a seemingly small target, as evidenced by the
data from the end of November, their total contribution was only
Rp 26.8 billion.

A number of city councillors blamed the failure on
mismanagement and corruption by the companies' executives. They
also expressed concern that the city administration still does
not have transparent data about the city assets.