Mar'ie says no more delays needed in property tax law
Mar'ie says no more delays needed in property tax law
JAKARTA (JP): Minister of Finance Mar'ie Muhammad expressed
confidence yesterday that Indonesia's battered economy would
start recovering after the convening of the People's Consultative
Assembly (MPR) in March.
Therefore, Mar'ie said, the 6-month delay in the
implementation of a building and land purchase tax law was enough
to relieve some of the people's burden.
"We must be optimistic that after the general session, there
will be certainty and the recovery process will start," Mar'ie
said at a session with House of Representatives Commission VIII
for state budget and finance.
The MPR will convene in March to elect the country's president
and vice president.
Mar'ie made the statement in response to a demand by the
Moslem-oriented United Development Party (PPP) faction and the
minority Indonesian Democratic Party (PDI) faction that the
government extend the delay in the enforcement of the land and
building purchase tax law from six months to at least one year.
The government, through a presidential decree dated Dec. 31,
1997, postponed the implementation of the tax law from its
original date of Jan. 1, 1998 to June 30, 1998.
The decree said the worsening economy had greatly burdened the
people, and therefore it was necessary to postpone the
implementation of the tax law, which could add to the people's
burden.
Hamzah Shodiq of the PPP faction and Nico Daryanto of the PDI
faction said at Monday's working session that the current
economic turmoil could last longer than the government expected.
And therefore, they said, the government should postpone the
enforcement of the tax law until at least next year.
However, Mar'ie argued the six-month delay was enough since
the government would also abolish other levies imposed on land
and building purchases once the new tax law was in place.
Law No. 21/1997 on the land and building purchase tax, if
implemented, would require anyone purchasing land worth more than
Rp 30 million (US$3,000) to pay a 5 percent tax to the
government.
Mar'ie said the land and building purchase tax was introduced
to compensate local administrations' possible loss in revenue
from various levies and local taxes as regulated by the local tax
and levies law, which would come into force May 23.
The government has targeted in the 1998/1999 draft state
budget to collect Rp 3.4 trillion in property taxes, with Rp 2.9
trillion from the land and building ownership tax and Rp 500
billion from the land and building sales tax. (rid)