Owners skeptical about progressive car tax plan

Owners skeptical about progressive car tax plan

JAKARTA (JP): Car owners are skeptical about a planned
progressive car tax, saying it will only create new loopholes for
corrupt officers.

"More loopholes will be created because of this new car tax as
long as services and the administration at agencies involved in
the issuance of car ownership documents remain poor," said
Thomas, an East Jakarta resident who owns two cars.

Thomas was commenting on a bill on a new car tax, which
includes an annual progressive car tax system. The bill was
approved Monday by the City Council and Governor Surjadi
Soedirdja.

The bill, to be put into effect this year, states that
motorists must pay 120 percent of effective tax levels for a
second a car, 140 percent for a third car, 160 percent for a
fourth car, 180 percent for the fifth and 200 percent for the
sixth and any others. The extra taxes will be imposed on owners
of passenger cars (and on companies owning more than one cars)
that are not used for public transportation.

"The idea is good, but the question is, will the practice be
good as well? Can all of the funds collected from this
progressive tax be used for the public welfare as planned? And
will there be a guarantee that the funds will go to the right
place?" Thomas asked yesterday in an interview with The Jakarta
Post.

Rudini

In 1992, the minister of home affairs at the time, Rudini, one
of the supporters of the policy, suggested that the
administration use the funds collected from the progressive tax
to purchase more buses.

"This (tax collection) will allow people to own six to 10
cars. On the other hand, the money generated from the private
vehicle tax can be used to subsidize public transportation," said
Rudini.

The progressive car taxes are, according to the City Council,
aimed at increasing the city's revenue. It is also to ensure a
more equal distribution of wealth among the residents by drawing
more taxes from the rich to help solve the city's traffic
problem.

Thomas said he doubts that the progressive car tax will solve
the traffic problem.

"First, people will complain, but then since there is no other
choice, they would rather pay the tax than to take public
transportation, which cannot yet be relied on," he argued.

Several other car owners interviewed by the Post also
expressed their doubts that the new system can be implemented
properly.

"It will only open more doors to corruption, for example, by
those in charge of the issuance of ID cards or family cards,"
said a production manager of a pharmaceutical company in West
Jakarta who declined to give his name.

Meanwhile, Mansyur Achmad, the chairman of the City Council's
Commission D on transportation, said that the newly passed bill
is designed to take into account the practice of owners of more
than one car registering the cars under various names to avoid
the tax.

Requirement

The bill requires the use of family identity cards and
personal identity cards as a basis of identification to determine
who will pay the tax, Mansyur said.

Family identity cards record the identity of a family who
lives at one address. The cards must be approved by the heads of
the community units where the family resides. Persons other than
the mother, father and children of the family are excluded from
the cards.

This means that it would be theoretically impossible for an
owner of more than one car to register his second car using the
name of his servant or other non-family members.

Mansyur said yesterday the details on how to protect the
regulation from such delinquent tax payers will be discussed
later, and particulars about it will be appended once the newly
passed bill is approved by the Minister of Home Affairs.

Some members of the City Council said that to effectively
implement the new regulation, district and subdistrict officials
will check car ownership in their areas.

The majority of owners said that they were not yet well-
informed about the new system. They were also in the dark about
the important role of the family identity cards in car ownership
registration. (als/arf)