Reviewed tax on vehicles to be announced Friday

JAKARTA (JP): The city administration bowed on Tuesday to widespread demands for a review of vehicle tax increases, saying the tax on certain vehicles, except those classified as luxury, would be lowered.

Without going into details about the changes, Governor Sutiyoso said the review would be made in line with the interests of less affluent citizens.

"The changes will be announced on Friday," Sutiyoso said after distributing donations to people living in Pulogadung, East Jakarta.

The city administration increased the vehicle tax based on gubernatorial decree No. 33/2001 on the vehicle registration tax and vehicle change of ownership tax.

City bylaw No. 3/1998 on the vehicle registration tax has set a tax rate of 1.5 percent of the vehicle price.

Although the city administration said the increase was set between 0.34 percent and 22 percent, in reality it extended to between 80 percent for motorcycles and 100 percent for cars.

Deden Supriadi from the City Revenue Agency said the 100 percent increase was a result of two hikes in the 1999/2000 and 2000 budget years.

Sutiyoso said on Tuesday that car owners who had already paid their vehicle taxes could not be refunded any overpayment, but the excess would instead be deducted from next year's tax payment.

"There would be a tax restitution. It would difficult if they (car owners) wanted their money to be returned right now," the governor said.

The city administration has came under widespread criticism because of its decision to increase the tax.

The Indonesian Consumers Foundation (YLKI) suggested that the city administration was trying to meet the city revenue target without having to work any harder. The city authorities, he recommended, could instead boost profits from its firms to collect more revenue.

Following mounting public pressure, Sutiyoso hinted last week that he would lower taxes for several types of car which are commonly owned by the general public.

However, he said that the administration would, in turn, increase the tax on luxury cars, because their taxable prices were considered lower than market prices.

Sutiyoso described the list of vehicle prices stated in a ministerial decree No. 10/2001 on vehicle registration fees and the change of ownership taxes issued by the Ministry of Home Affairs and Regional Autonomy as unfair.

He questioned the price of a Ferrari sedan, which was set by the ministry at Rp 1.7 billion (US$154,545) despite the market price of the Italian luxury sports car reaching Rp 3.3 billion.

The city administration has set a target of Rp 2 billion in revenue to be raised through the vehicle tax and change of ownership tax this year.

There are 1.9 million vehicles in the capital, including 924,077 wagons and 364,417 sedans. (jun)