JAKARTA. Jakartans will have to double their property tax budgets as the city administration has decided to increase the taxable value of property (NJOP) by between 120 and 240 percent as of this year.

The authority to collect land and building tax (PBB) was transferred to the city administration by the central government in November 2012, allowing the city to collect land and building tax for its sole use, instead of sharing them with the central government as it had done in the past.

As per the transfer of authority, the city is also authorized to set the value of taxable assets, including land and buildings.

“We are increasing the NJOP rate because it has not been adjusted in four years. With the increase, the gap between the NJOP and market prices is reduced,” Deputy Governor Basuki “Ahok” Tjahaja Purnama told reporters at City Hall on Wednesday.

“Those people who can’t afford to pay [their land and building tax] can submit a proposal and we may reduce their taxes,” he said.

According to taxation website pajak.go.id, the city might provide tax reductions of up to 75 percent in accordance with certain terms and conditions, including for taxpayers on low incomes, retirees and war veterans, as well as victims of natural disasters.

Anton Sitorus, head of research at property consultant Jones Lang LaSalle, criticized the tax increase, saying it was “extreme”.

He pointed out that the policy would trigger widespread speculation on land prices. “Market prices will likely follow suit,”

SUMBER