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Heavy equipment still subject to tax

August 12, 2009 - 07:49 AM

The government and the House of Representatives (DPR) have agreed to impose vehicle tax on heavy equipment and large equipment in the amendment to Law Number 34 Year 2000 regarding Regional Taxes and Levies, Bisnis Indonesia Daily reported on Wednesday.

Chairman of the Ad Hoc Committee for the Amendment to the Law Harry Azhar Aziz said that the imposition of the tax won’t burden business communities because the rate has been cut down.

“The rate has reduced to 0.1% - 0.2% from 0.5% so that regional governments could apply tariff on the basis of the range but the rate must be applied by a regional regulation,” he said, adding that the imposition of the tax is intended to provide funds for regional governments to repair environmental damage attributed to the operation of the heavy equipment.

The basis for imposition of the tax is counted from the selling value of vehicle and at least ten percent of income resulting from the tax would be distributed to regions to finance the development and maintenance of roads and conserve environment.

Coal mining concession holders joining in the Indonesian Coal Mining Association (APBI) filed judicial review of the law to the Constitutional Court in April 2009 because they raised objection to the provision of Article 2 paragraph (1) of the law, which includes heavy equipment as an object of vehicle tax. (*)

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