Local taxes, fees bill 'to boost revenues'
Local taxes, fees bill 'to boost revenues'
JAKARTA (JP): The local taxes and fees bill aims to provide
legal certainty and raise local administrations' incomes,
Minister of Finance Mar'ie Muhammad said yesterday.
Speaking at a House of Representatives plenary session, Mar'ie
said the new bill would reduce the number of taxes collected by
local administrations.
To compensate for abolished taxes, the bill had new taxes
which could generate more income, Mar'ie said.
He said simplifying and improving the structure of local taxes
and fees was expected "to create a healthy climate for
investment".
"With the simplification of local taxes and fees, local
administrations could collect more taxes and fees with more
economic potential," Mar'ie said.
The new taxes for local administrations include a gasoline
tax, land-water tax and extraction and processing of minerals
tax.
Mar'ie said the gasoline tax, set at a 5 percent maximum,
could be local administrations' best earner.
Although the gasoline tax would be under the provincial
administrations' jurisdictions, 80 percent of gasoline taxes
would go to regencies.
The proposed maximum 20 percent tax on land-water exploitation
was not only intended to generate local revenue but also protect
the environment, Mar'ie said.
The bill on local taxes and fees sets a maximum 20 percent tax
on the extraction and processing of minerals.
It sets maximum rates for other regency taxes: 10 percent for
street lighting tax, hotel tax and restaurant tax; 25 percent for
billboard tax; and 35 percent for entertainment tax.
Some local administrations already collect fees from land-
water exploitation, extraction and processing of minerals,
billboard tax and entertainment tax. These collections are
usually governed by local rules.
Local administrations could introduce the new taxes between
one and five years after the bill was passed into law, Mar'ie
said.
"The sooner a local administration adapts its rulings with the
new law, the sooner it can introduce the gasoline tax," Mar'ie
said.
Mar'ie responded to questions from the House on three other
bills presented by the government yesterday. The bills are on the
transfer of land and buildings tax, tax collection with distress
warrants and tax courts.
Mar'ie said all four bills would play an important role in
providing a fair and clear legal foundation for tax collection.
The bill on the transfer of land and buildings tax stipulates
that any transfer of land title or buildings worth more than Rp
20 million (US$8,400) is subject to a 5 percent tax.
The bill on tax collection with distress warrants empowers tax
collectors to issue distress warrants, confiscation letters and
debt-bondsman warrants.
The bill stipulates that a distress warrant can be issued if a
taxpayer does not meet his tax obligation on time. Confiscation
letters can be produced 24 hours after the issuance of distress
warrants. A debt-bondsman warrant can only be issued with the
consent of the finance minister or the head of a local
administration.
The tax office can stop a person, with a tax debt of at least
Rp 100 million (US$42,300), leaving the country for up to six
months. This period can be extended twice.
The bill on tax courts governs the establishment of a tax
court in Jakarta and, if necessary, tax courts elsewhere.
The court would handle disputes such as taxpayers' objections
to tax officials' decisions, and complaints on the levying of
taxes. (rid)