Nine taxes may be left after new tax law is effective
Nine taxes may be left after new tax law is effective
JAKARTA (JP): Nine of the 14 city taxes are likely to remain
after the new bill on taxes and levies becomes effective on Jan.
1 next year, a councilor said.
The head of the City Council's Commission C on financial
affairs, Helmy A.R. Syihab, said some of the taxes no longer
brought in income.
"The taxes that could be abolished are those that have high
operational costs but raise less income than expected," Helmy of
the United Development Party said yesterday.
He said the five local taxes that could be abolished were
taxes imposed on water transport vehicles, the transfer of water
transport vehicle ownership, non-motorized water vehicles like
boats and rafts, the transfer of non-motorized water vehicle
ownership, and the slaughter of livestock.
"The five taxes can be abolished soon as the new law comes
into effect. But now we're waiting for further details on the new
law on local taxes and levies," Helmy said.
However Helmy said all fees were likely to remain. City
secretary for economic and development affairs Prawoto S.
Danoemihardjo said earlier that fees were attached to city
services and should remain. It was illegal levies that led to a
high cost economy and should be eliminated, he said.
The new law says most non-tax revenue must be accounted for.
Helmy said current levies collected by the city, such as for
building permits or parking, were still important to fund city
projects.
For instance, he said, the city needed a lot for
infrastructure, such as streets, to accommodate the rapid
increase of vehicles.
"Without the income from taxes and levies, it would be very
difficult for the city to raise funds," Helmy said.
For the 1997/1998 fiscal year, the municipality hopes to
collect Rp 1.63 trillion (US$708.6 million) from taxes and Rp
290.72 billion from levies.
On Thursday, the House of Representatives passed five bills,
including the bill on local taxes and levies, into laws.
Municipalities have five years to phase out existing
regulations on taxes and levies which contradict the new laws.
Provincial administrations will only be allowed to collect
three kinds of taxes: motor vehicle registration, the transfer of
motor vehicle ownership and gasoline sales.
District administrations can collect six kinds of taxes. These
are on hotels and restaurants, entertainment services, street
lighting, advertisements, quarried minerals and ground water.
Helmy said another potential source of revenue based on the
new bill was the transfer of rights to land and buildings.
The bill, which still needs to be ratified by President
Soeharto, states that the transfer of rights to land or buildings
worth more than Rp 30 million is subject to a 5 percent tax.
(ste)