New bylaw on advertisement tax deliberated

JAKARTA (JP): City Council is currently deliberating a new municipality bylaw on the taxation of advertisements to replace existing Bylaw No. 10 approved in 1989, councilor Lukman F. Mokoginta said yesterday.

Lukman said that based on the proposed bylaw the tax would be set at an average of 25 percent of the advertisement's value.

Elements taken into consideration for the calculation consist of the advertisement's location and area, type, height and time span, he said. The current bylaw makes the tax calculation depending on type and form.

For example, advertisements in the form of stickers attract a tax of Rp 1 per square centimeter per single display, brochures Rp 25 per sheet, moving advertisements Rp 10,000 per day, audio advertisements Rp 100 per 15 seconds and television advertisements Rp 5,000 per 15 seconds.

The items mentioned in the tax under deliberation are the same as those in the current ordinance. They include billboards, banners, stickers, brochures, moving and mobile advertisements, demonstrations, air and audio advertisements and slides or films.

"For alcohol products and cigarettes, an additional 20 percent of the calculated tax value will be imposed on advertisements," Lukman said.

Advertisements for alcohol and cigarettes are currently charged with an additional tax ranging from 10 percent to 25 percent of the calculated tax value, Lukman said.

The proposed bylaw should eliminate the collection of fees by private parties whose properties or locations are used to display the advertisements, especially those in the form of billboards, he said.

He underlined the importance of such an elimination because the City Regional Revenue Office had reported that advertisers had been charged by parties other than the office.

"State-owned toll road management company PT Jasa Marga, for example, has been charging the advertisers who display their ads along the toll roads or in areas where the displays could be seen by toll users."

He said Jasa Marga defended the collection of such advertisement fees from advertisers on the grounds that a certain presidential decree had given them the right to do so.

"Unfortunately, we have not been informed about which decree gives them the right to do that."

Lukman said that such practices had only resulted in huge unnecessary costs on the part of advertisers.

"Advertisers must only be charged by the city administration because under the regulation, the latter holds the sole authority to collect fees and taxes from the people as individuals or institutions," said Lukman. (cst)