New bylaw on advertisement tax deliberated

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)