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)