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Energy ministry urges regions not to raise fuel tax before polls
The energy ministry has called for regional restraint after Jakarta and Banten unveiled last month separate plans to raise the local fuel tax, especially ahead of the general election on Feb. 14.
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A Gojek driver fills up his motorbike on Nov. 21, 2017 at a gas station in Jakarta. (Antara/Akbar Nugroho Gumay)
T
he Energy and Mineral Resources Ministry has called for Jakarta and several other regions to postpone their plan to hike the fuel tax, citing a need to review the policy and the general election less than two weeks away.
The ministry made the call after Jakarta provincial administration rolled out a regulation in January to double the fuel tax for private vehicles to 10 percent while keeping the current tax rate of 5 percent for public vehicles.
Banten followed suit by also enacting a fuel tax regulation last month.
Jakarta’s new regulation draws its roots from Law No. 1/2022 on central-regional fiscal relations, which places a 10 percent cap on the fuel tax.
The law was introduced to reduce the reliance of regional administrations on the central government in funding their spending budgets, including additional measures to increase local revenues based on their potential.
Read also: Govt targets tax revenue hike despite commodity price drop
Oil and gas director general Tutuka Ariadji said on Wednesday that the ministry had laid out several possible consequences of increasing the fuel tax policy in a letter to the Finance Ministry and Home Ministry, including the potential negative impacts in view of the general election on Feb. 14, as quoted by Bisnis.com.
