Sutiyoso yields on tax, some may escape hike

Sutiyoso yields on tax, some may escape hike

JAKARTA (JP): Governor Sutiyoso finally gave in to public
pressure to revise its controversial decision to increase vehicle
registration fees, allowing owners of certain cars to pay less.

"I have agreed that the fees for moderate cars will be
reviewed, but not for luxury cars," Sutiyoso said after joining
the Friday prayer at Al-Makmur mosque in Tanah Abang, Central
Jakarta.

He said he would review the registration fees and tax on a
vehicle's change of ownership made before 1990, by lowering the
cars' prices, which are used as the basic calculation for the
tax.

"But we will not review the (increase) tax for luxury cars
since the prices decided by the central government are lower than
the market price," Sutiyoso said.

For example, he said the price of a Ferrari on the central
government list was only Rp 1.7 billion (US$154,545) while the
market price is Rp 3.3 billion.

"So it's not fair if the owner of the Ferrari pays only Rp 25
million for the registration fee, although they were able to buy
the car for Rp 3.3 billion," he said.

He also agreed to charge higher taxes on vehicles older than
20 years, for their part in contributing to air pollution.

"It has become a major concern in the world, so older cars
which contribute to air pollution should pay higher taxes," he
said.

As of last month, vehicle registration fees increased by 100
percent.

The city has 1.9 million vehicles, including 924,077
motorcycles and 364,417 cars.

Sutiyoso, however, did not say whether registration fees and
the tax on a change of ownership for motorcycles, which has
increased by 80 percent, would also be lowered.

The Ministry of Home Affairs and Regional Autonomy issued
Decree No. 10/2001 on vehicle registration fees and the change of
ownership taxes, which includes a list of vehicle prices
applicable across the country.

But depending on the situation in the locality, a governor can
lower or increase the set prices as long as they are not 80
percent higher or lower than the market price.

Based on the new vehicle tax scheme, car owners have to pay a
tax rate of 1.5 percent times the vehicle's price as calculated
by the government.

The rate was stated in City Bylaw No. 3/1998 on vehicle and
change of vehicle ownership taxes.

Sutiyoso rejected the possibility that he would revoke
Gubernatorial Decree No. 33/2001 on the vehicle tax calculation
base, saying it was according to law.

Meanwhile, city administrative assistant Makmun Amin promised
that the city administration would continue to monitor the
payment of vehicle registration fees.

"Reviews to lower the fees and the tax will probably be
conducted in June," Makmun said after meeting with City Council
Commission C for city revenue on Friday.

After hearing the explanation given by executive officials in
the meeting, city councillors, who earlier demanded the city
administration to postpone the vehicle registration fee increase,
said they could understand the decision.

But the councillors regretted the lack of public notice about
the increase, which should have been conducted by the city's
revenue agency.

Commission C chairman Amarullah Asbah of the Golkar Party said
council supported the city administration to apply the
decision, by asking owners of luxury cars to pay more while those
with newer, more moderate cars pay less. (jun)