Council slams the administration over low tax revenues in 2011

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The Jakarta City Council criticized the administration over the under-collection of tax revenue during the last financial year in the Council’s response to Governor Fauzi Bowo’s financial report.

The Council convened in a plenary meeting at the council building on Friday, with each political party reading out their view of the financial report.

The nationalist Indonesian Democratic Party of Struggle (PDI-P), the third largest party in the Council with 11 seats out of a total 94, criticized the fact that despite the city bringing in a total of Rp 28.3 trillion (US$2.99 billion), more than its target of Rp 26.85 trillion last year, there were still under-performing taxes.

“Taxes of underground water, entertainment, billboards and parking didn’t reach their target incomes. These are taxes with potentially high revenue; the administration needs to explain this failure,” Cinta Mega, a representative from the PDI-P, said.

Cinta said her party was urging the city administration to make improvements in its systems and monitoring.

The Muslim-based Prosperous Justice Party (PKS), the second largest party with 18 seats on the Council, said it had yet to see serious efforts from the administration to increase revenue from several specific taxes.

“Each year, revenue from entertainment and billboards taxes has failed to reach their targets,” HM Subki, a PKS councilor, said.

PKS said that taxes on entertainment and billboards consistently fell more than 15 percent short of their targets.

Income from the taxes also only increased 1 percent and 4 percent, respectively, from year to year.

Earlier this week, Fauzi reported that regional taxes were the most significant income for the city, increasing 9 percent from Rp 13.96 trillion in 2010 to Rp 15.22 trillion last year.

Taxes that exceeded expectations were those on motor vehicles, vehicle fuel, hotels, restaurants, street lighting and duties on acquiring land and building rights.

Vehicle-related taxes, namely taxes on motor vehicles, vehicle fuel and vehicle-ownership transfer, make up the largest portion of the income, up to 60 percent.

The budget report said that the city administration in 2011 had a surplus of Rp 6.9 trillion, acknowledging that there were shortcomings in scheduling and implementation of programs, which caused such a staggering budget surplus.

Previously, the City Development Planning Board (Bappeda) announced that poor procurement procedures by the administration resulted in Rp 1.3 trillion of the budget being left unspent.

As a result, the administration had to allocate more time for procurements, making it miss its own deadlines.

Despite the shortcomings, the Supreme Audit Agency (BPK) for the first time ever gave its best mark to the administration’s 2011 financial report in May, saying that the financial report was clear.