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Jakarta set to raise vehicle taxes
Publication Date : 26-06-2014
Most members of the Jakarta City Council have voiced their support for the city administration’s plan to raise the taxes on vehicles on condition that the funds that will be raised from the move would be used to develop public transportation and cope with traffic congestion.
The move is among the measures being considered to address the city's traffic congestion problem.
During the council's plenary session to deliberate this measure on Tuesday, Prosperous Justice Party (PKS) member M. Subki said
his faction would support the city administration’s plan to raise the progressive vehicle taxes imposed on auto owners.
Subki said, however, that the revision bill should clarify the mechanism by which authorities would identify persons possessing more than one vehicle.
“Without such a mechanism, the enforcement of the revised bylaw will be ineffective,” he said.
Revision of the bylaw is mandated by Law No. 28/2009 on regional tax and retribution.
According to the bill, the tax would be raised from 1.5 per cent to 2 per cent for the first vehicle; 2 per cent to 4 per cent for the second; 2.5 per cent to 6 per cent for the third, and 4 per cent to 10 per cent for the fourth vehicle.
Acting Jakarta Governor Basuki “Ahok” Tjahaja Purnama said the bylaw’s revision should generate additional income from vehicle owners, and function as an instrument to help resolve the city’s chronic traffic woes.
He said that last year, the city administration received 4.6 trillion rupiah (US$383.68 million) in vehicle taxes from 4.78 million vehicles in the city. The figure is expected to increase to 6.41 trillion rupiah if the revision bill was endorsed and the progressive tax rates were increased.
Subki said his party had recommended that the city administration use the extra revenue for a public transportation development program. “Even if the progressive tax
is implemented, the number of private vehicles would remain excessive, and private car owners would remain reluctant to utilise public transportation because fleets are limited and service remains poor,” he said.
According to Subki, private vehicles dominated the number of vehicles on roads, with some 8.2 million motorbikes accounting for 67 per cent, and some 3.1 million cars accounting for 23 per cent of the vehicles, respectively. Public buses, on the other hand, accounted for just 4 per cent of vehicles.
The Indonesia Democracy Party of Struggle (PDI-P) faction also agreed with the plan but said the city administration should increase the availability of public transportation.