House Of Representatives Commission II: UN-P2 Tariffs Rise In A Number Of Areas Triggered By Various Complex Problems

JAKARTA - Member of Commission II of the Indonesian House of Representatives, Muhammad Khozin, assessed that the phenomenon of increasing the rate of Rural and Urban Land and Building Tax (PBB-P2) in a number of regions must be responded to quickly by the central government.

According to him, the policy taken by regional heads as an effort to increase local revenue (PAD) was triggered by several complex problems.

"The increase in PBB-P2 as an effort to increase PAD in each region for the benefit of regional spending, was triggered by delays in tax tariff adjustments that occurred for years in the regions. As a result, when the tariff increase policy was carried out, it experienced a fantastic spike," said Khozin to reporters, Tuesday, August 19.

Khozin said the increase was also triggered by a surge in the Tax Object Selling Value (NJOP) based on the appraisal team which did not match reality, aka inaccurate.

"So the trigger is quite diverse in each region," said Khozin.

However, Khozin said that the increase in PBB-P2 rates was indirectly due to the enactment of Law NO. 1 of 2022 concerning Central and Regional Financial Relations (HKPD). Article 41 paragraph (2) of the HKPD Law states that it has changed the maximum tariff limit for PBB-P2 from 0.3 percent to 0.5 percent.

"So the local government has greater room to increase tariffs if deemed necessary," said Khozin.

In addition, the PKB politician said that the HKPD Law also contained provisions regarding the Taxable Selling Value (NJKP), namely a minimum of 20 percent to a maximum of 100 percent of NJOP after deducting NJOP from being taxable as stated in Article 40 paragraph (5) of the HKPD Law.

"The local government can increase the percentage of NJPKP imposition wider. The impact of the increase in PBB-P2 is nominally higher," he explained.

According to Khozin, the increase in the PBB-P2 is also a motivation for the local government because it is related to the allocation of Revenue Sharing Funds (DBH) from the central government to local governments whose composition of the DBH allocation is 90 percent based on the proportion of yield and status as producing regions and 10 percent based on local government performance ( ARTICLE 120 of the HKPD Law).

"So, if regional revenues increase, including the productive sector (including PBB-P2), then this area has the potential to get a larger DBH in the following year. Yes, this is an incentive given by the center to the regions, but with a record that the regions have good performance," explained Khozin.

Khozin said the phenomenon of increasing the PBB-P2 was inseparable from regional financial burdens. Therefore, he stated, Commission II of the DPR and the Minister of Home Affairs are formulating a formula to organize regional BUMD management as an effort to strengthen financial revenue in the regions.

"This point is the root cause of the problem. Therefore, since the beginning of this year, Commission II of the DPR and the Minister of Home Affairs have intensively discussed improving the governance of BUMD in the regions as an effort to strengthen regional income," he said.

"Opsi yang muncul di antaranya membentuk UU khusus tata BUMD yang dimaksudkan sebagai sumber bagi penerimaan daerah," pungkas Khozin.