Progressive Taxation Start From 2011

Jakarta, Kompas - To reduce the level of ownership and use of motor vehicles, the city administration will implement a progressive tax motor vehicles in 2011. Parliament requested that tax revenues are used to improve the transport sector.
Head of Tax Service Iwan Setiawandi Jakarta, Sunday (26/12) in Central Jakarta, said the first private vehicle motor vehicles will be taxed at 1.5 percent of the purchase price of the vehicle. Tax for private vehicles both rose to 1.75 percent, 2.5 percent the third vehicle, and four vehicles, and so on 4 percent.

Progressive tax is imposed it is still lower than the progressive tax rules set out in Law No. 28/2009 on Regional Taxes and Levies, which is 10 percent. In the Law, every local government is given discretion to determine the amount of tax according to their economic potential, as long as not to burden the residents.

According to Blue, this step can affect two things, increase revenues dramatically or drop in local revenues from taxes. However, the application of these taxes are aimed at pressing the ends of motor vehicles is to reduce vehicle usage and congestion level.

"DKI Jakarta ready if revenue from motor vehicle taxes down. Each policy must be consequences. We will boost revenue from the building sector, "said Iwan.

Based on data from the Jakarta Police, the number of private cars in Jakarta, 8.5 million units (motorcycles and cars). With a population of 9.6 million people, each family on average has three personal vehicles or more.

Chairman of the Jakarta City Council Transportation Principle Tigor Nainggolan said, the number of private vehicles owned by each family trigger a number of vehicle usage. This is a major cause of occurrence of congestion.

For infrastructure

Application of progressive taxes is expected to be one way to reduce congestion. Progressive tax is expected to also apply in Bodetabek for vehicle ownership is not shifted to the suburbs and still go to Jakarta, sparking traffic jams.

Member of Commission D of the DPRD DKI Jakarta M Sanusi said that if the progressive tax policies to increase local revenues, the allocation of funds to build roads and mass transit infrastructure. If mass transit and infrastructure increases, the congestion can be reduced.

"Funds from progressive taxes should be mixed with other funds and go into the revenue budget. Additional revenue should be recorded and allocated to build the infrastructure and mass transit, "he said.

Transjakarta bus mass transit can be ideal if the fleet added significantly and improved its management system, such as management of TransMilenio in Bogota.
Source : Kompas, December 27, 2010