Vehicle tax hikes violate ministerial decree: Councillor

Vehicle tax hikes violate ministerial decree: Councillor

JAKARTA (JP): The city administration's decision to review the
controversial vehicle tax increases has obviously been made at
the request of the Ministry of Home Affairs due to violations
against the ministry's decree.

City Council deputy chairman Djaffar Badjeber revealed on
Wednesday that Director-General of Regional Autonomy Sudarsono
signed a letter dated May 18, urging the administration to make
the review.

"The gubernatorial decree had 90 percent violated the
ministerial decree, causing a high increase (in taxes),"
Sudarsono said in the letter as quoted by Badjeber.

Badjeber said gubernatorial decree no. 33/2001 on vehicle tax
increased the vehicle prices from those on the list issued by the
ministry through its decree no. 10/2001 on vehicle registration
fees.

Separately, City Revenue Agency Head Deden Supriadi admitted
that the gubernatorial decree was different to the ministerial
decree.

"The gubernatorial decree is flexible. But it is permissible
(to increase the prices) due to the local situation," Deden told
reporters.

He said the vehicle prices in the list issued by the
ministerial decree, which was applicable across the country, was
only 70 percent of the market prices here.

In the gubernatorial decree, the price of vehicles was higher
because the list was based on 80 percent of market prices, Deden
said. He maintained that the increases were actually still within
the tolerance laid down in the ministerial decree.

However, Deden added, City Governor Sutiyoso had decided to
lower the tax for certain vehicles.

He said the tax on all vehicles produced before 1991 and on
all vehicles, except sedans and jeeps, before 1995 would be
lowered.

"The details will be announced on Friday," Deden said.

Sutiyoso said on Tuesday that the city administration decided
to lower the tax for certain vehicles to meet the demands of the
public. Vehicle owners who had paid the increased tax would
receive a tax refund that would be credited to their tax bill
next year.

Although the city administration said that the tax increase,
applied at the end of last month, was between 0.34 percent and 22
percent, in reality it reached between 80 percent and 100
percent.

Several non-governmental organizations (NGOs) have criticized
the city administration for its decision to increase the tax in
order to increase the city's revenue without working hard.

The NGOs suggested the city improve the management of city-
owned firms to collect more profits, instead of increasing taxes
on the public. (jun)