Administration seeks revenue boost amid budget deficit

Mustaqim Adamrah , The Jakarta Post , Jakarta | Sat, 07/19/2008 11:02 AM | City

The Jakarta administration is seeking ways to boost revenue in an attempt to avoid budget deficits amidst fuel price increases.

"The administration hopes to be able to increase city revenue from what has been projected," City Secretary Muhayat said Friday at City Hall.

He said the administration has yet to decide how to do so and what sectors it could source from to boost city revenue, adding that it was not the right time to share this information with the public.

"We still need to discuss this with city councilors," he said.

A number of city officials, including the city secretary, assistants to city secretary, city agency heads and city bureau heads, deliberated the draft of the revised 2008 city budget with councilors in Bogor, West Java, on Thursday.

A member of the council's Commission C on finance, Mohamad Nakoem, said in the Bogor meeting commission members suggested the administration recalculate revenue from vehicular fuel tax to look for a possible revenue increase.

The administration has projected Rp 8.4 trillion (US$921.56 million) in total tax revenue, he said, an increase from Rp 8.3 trillion recorded last year.

"Commission members think vehicular fuel tax revenue will increase as a consequence of fuel price increases," he told The Jakarta Post.

"But the administration should gather information from (state oil and gas firm) Pertamina to confirm whether or not its revenue really will increase in response to fuel price increases."

However, he said motorists might become thrifty and decrease their fuel consumption substantially, hurting fuel tax revenue.

Nakoem said the administration had "very few options" to boost city revenue.

He said it would be difficult to collect more revenue than already projected in the city budget from, for example, the vehicle tax.

"The administration needs a joint decree signed by the home minister, the transportation minister and the finance minister to revise an ordinance to increase the vehicle tax," he said.

"Such a process is complicated and will take time."

The administration's efforts to increase city revenue have also been triggered by the city budget's deficit amounting to Rp 1.8 trillion as of May.

The deficit has forced the administration to revise the 2008 city budget from Rp 20.59 trillion to Rp 20.25 trillion.

The Prosperous Justice Party (PKS) faction has recommended the administration annul a number of council proposals.

Faction member Hidayat Rohim said in a previous plenary session the council had proposed Rp 4.3 billion for council speakers' operational cars.

"The council has also proposed Rp 40 billion for 11 activities that replicate similar activities already planned by city working units. In addition, Rp 21.79 billion has been proposed for 44 studies that should be conducted by the administration, not the council," he said.

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