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City keeps vehicle taxes the same, rejecting ministry's proposal
Jakarta Governor Fauzi Bowo on Friday said he would not lower the province's automotive taxes to boost the economy
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Jakarta Governor Fauzi Bowo on Friday said he would not lower the province's automotive taxes to boost the economy.
The idea of lowering automotive taxes arose Wednesday at a meeting between the Finance Ministry and the Jakarta Revenue Agency on the provinces' economic stimulus plan.
On Friday, however, Fauzi made it clear that the province's automobile taxes were part of his office's turf and not the ministry's.
"That *the automotive taxes* is not the ministry's matter," he said. "It's mine.
"I've always said that if we want to have a stimulus plan it should be something that matters to the industry and one that creates jobs.
"We shouldn't have a stimulus plan by cutting *revenue* here and there." he said.
The Indonesia Automotive Industry Association (Gaikindo) estimates that new car sales will decline by 33 percent to 405,000 units this year from 605,000 units last year due to weakening purchasing power.
Fauzi said the city administration had cut enough of their revenue from transportation by scrapping fees for public bus owners.
Public bus owners are now exempt from paying terminal entrance fees, six-month vehicle inspection fees and route license fees. This was part of the administration's policy to cut bus fares in January.
Automobile taxes make up most of the city's tax income. From vehicle ownership transfer fees, the city earns Rp 3.06 trillion or 32.65 percent. From vehicle taxes, the city earns Rp 2.8 trillion, or 29.8 percent.
For 2009 revenue, the city expects to gain Rp 9.39 trillion from taxes.
-JP/Prodita Sabarini
