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)