Jakarta to Increase Vehicle Ownership Tax

TEMPO.CO, Jakarta - The Provincial Government of DKI Jakarta will increase the rate of vehicle progressive tax for private use.  Head of Jakarta's Tax Service Department Iwan Setiawandi, said that the tax increase will be applied this upcoming December 2014.

"[The increase] may start in December, or January 2015 at the latest," Iwan said in a written statement on Wednesday, November 12, 2014.

Currently, the regulation is being evaluated by the Ministry of Interior Affairs and the Ministry of Finance. The Jakarta Government hoped that the regulation would be approved.

Iwan said that the progressive tax will be valid for a household that owns more than one vehicle. For example, if a family owns three cars, then progressive tax will apply.

For the first-owned vehicle, Iwan said that the government will increase the tax rate from 1.5 percent to two percent of the vehicle’s listed price. For the second-owned vehicle, the tax will be increased from two percent to four percent while tax for third-owned vehicle will be up from 2.5 percent to six percent. Furthermore, tax rate for a family's fourth vehicle or more, will be increased from four percent to 10 percent.

Hopefully, the increase will help to generate higher tax revenue for the government.

NUR ALFIYAH