NJOP preferred in state assets assessment

The Jakarta Post, Jakarta

The government is starting to consider a plan to use the official taxable property value (NJOP), instead of the current market price to reassess state assets scattered across the country.

The Ministry of Finance's Director for the Management of State Assets Herry Purnomo said financial and time constraints were behind the government's consideration for the new assessment procedure.

"If the government hires independent appraisers to assess state assets, it will be very expensive and take years to complete," he said in a seminar on Tuesday.

Herry explained that the government would benefit by using the NJOP price data, which is readily available, as it would be more expedient in getting an accurate picture of the proper value of its assets, some of which were last valued up to 30 years ago.

The government's 2004 financial report -- submitted to the Supreme Audit Agency -- put the price of some state assets at Rp 1 each.

Economist Iman Sugema of the Bogor Institute of Agriculture said that using the taxable value was preferable to the current system -- which nominally valued some assets, such as land, irrigation and bridges at Rp 1 to enable them to be accounted for as state inventory.

However, he said, the government should start using independent appraisers to get a truer sense of the market value of its assets.

"Valuing the assets below their market price is very dangerous because it leaves room for improperly selling them at a cheap prices," said Sugema, adding that the data for the NJOP was updated only once every five years.

Emmy Hafild of Transparency International concurred with Sugema, saying that using the taxable value was still not good enough as it was normally lower than the actual market value of the asset.

"The government will not benefit because the price stated in the NJOP is lower than the market price," she said. "Even banks conduct independent surveys and use the market value, why can't the government?" (002)