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Analyzing The Complexity of Local Property Tax


Local government has big opportunities to raise the local revenue. The effort to increase local revenue was by local taxes including land and building tax of rural and urban. Prof. Dr. Mardiasmo, MBA., Akt. said that one of transfer policy of central tax into local tax which was regulated in Law No. 28 Year 2009 was the establishment of Land and Building Tax of rural and urban, and tax acquisition of land and building into local tax. “Local government was given the authority of taxation in the form of maximum rate increase, tax object expansion, and the transfer of several taxes into local taxes,” said deputy of finance minister Republic of Indonesia in national seminar of Optimization of Land and Building Tax Revenue rural and urban and territory order in commemorating the two decades of MEP FEB UGM, in Auditorium of MM FEB UGM on Saturday, 6th June, 2015.

Putut Hari Satyaka, SE., MPP. said that local tax contribution and local retribution through local revenue was still relatively small, yet we had to manage well both of them. Meanwhile, transfer from central government such as General Allocation Fund is the largest source of funding regional development. This is confirmed by the statement of Marten Taha, SE., M.Ec.Dev. as Mayor of Gorontalo that the majority of funding came from the transfer of funds, such as General Allocation Fund. “Even in the context of macro, property tax through GDP from 2009 – 2013 is getting down,” said Ir. Amid Yusuf, MAPPI (Cert.) as the chairman of Indonesian Appraiser Society (MAPPI).

“Although relatively small, strengthening of local taxing power to extend the tax is by increasing tariff and its discretion,” said Putut Hari. “In the period of 2 – 4 years that will be occur a declining on property tax, yet the value of land and buildings in the future will continue to increase,” said Director of Regional Tax and Retribution, ministry of Finance, Republic of Indonesia. Putut elaborated the problems which was faced by some regions such as slow in setting up the infrastructure, policies which were still applying the single policy and areas with small tax potency due to the disincline of collecting taxes.

According to Putu, the key of success of regional property tax implementation was the availability of local tax legislation, the collaboration with banks and notaries continue to be carried on, infrastructure and community socialization. Dr. Akhmad Makhfatih, MA. added that it was needed an information system of property tax good management. Besides, taxpayers should get social sanction, as has been done by Gorontalo government by providing information board of property tax.[prs]

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