New land taxation needed

JAKARTA (JP): State Minister of Agrarian Affairs Soni Harsono has called for a new land tax system to stop speculation and the dereliction of land.

"The current land taxation system tends to encourage speculation among buyers and owners because it is only based on the land's economic value," he said after addressing a national ministry meeting Sunday evening.

He said the system taxed derelict land at a lower rate than land which had been developed, he said.

He said a new system was necessary to stop people from neglecting land and accumulating derelict land.

Many people wanted to buy land for speculation only, hoping to sell it at a higher price later, he said.

Such buyers had no intention of building houses or using the land for economic activities, he said.

"As a result much of the land they buy is derelict," he said.

Soni said his ministry had issued a new regulation banning companies without land licenses from clearing land.

But many land clearances were conducted on behalf of a director or a shareholder of other companies which had the licenses, he said.

He said that between 1993 and 1996 his ministry issued 9,264 licenses for 6.2 million hectares of land, excluding industrial estates.

He said his ministry had issued 169 licenses for industrial estates covering 53,000 hectares in 17 provinces. (bnt)