Progressive car taxation begins April 1 in Jakarta

Progressive car taxation begins April 1 in Jakarta

JAKARTA (JP): Residents and companies who own more than one car will have to pay tax at rates between 20 and 100 percent higher the current effective car tax rates when the progressive car taxation system comes into force next month.

"The Jakarta municipal regulation on the progressive car taxation system has been approved by the Minister of Home Affairs and will be enforced beginning next month," Wahab Rachmatsjah, chief of the Jakarta Revenue Agency, said yesterday.

The regulation, approved by the City Council last July, is designed to increase municipal government revenue and to slow the growth in the number of private cars by promoting the use of public buses instead.

The regulation requires motorists to pay 120 percent of the effective car tax rate for a second car. The tax rises to 140 percent for the third car, 160 percent for the fourth, 180 percent for the fifth and 200 percent for the sixth and subsequent cars.

The municipal administration annually revises the car tax levels to reflect changes in the market prices of cars.

According to the latest car tax levels, for example, sedans of 1993 or newer makes with sale prices of less than Rp 50 million and with engines of between 1,200 to 1,500 cubic centimeters (cc) are subject to a tax of Rp 393,600 (US$177), while those with 1,501-1,600 cc engines are subject to a tax of Rp 458,400.

Sedans of 1993 or newer makes with sale prices in excess of Rp 120 million and engines of between 2,101 cc and 2,400 cc are subject to a tax of Rp 1.17 million.

The regulation imposes the progressive tax rates on a family and its members (as stipulated in the resident family card) and on companies and other legal entities.

The City Council estimated last year that around 130,000 of the 1.8 million passenger cars registered in the city would be subject to the progressive tax rates. (yns/vin)