MUI Fatwa Response To The United Nations, Stafsus Pramono: If Not Explored, Whose Income Is Higher Will Control Land

JAKARTA The Deputy Coordinator of Special Staff for the Governor of DKI Jakarta, Yustinus Prastowo, emphasized that the Land and Building Tax (PBB) remains relevant to be applied repeatedly, in response to the fatwa of the Indonesian Ulema Council (MUI) which considers the UN not feasible to be collected regularly.

Prastowo explained that tax collection when someone buys land or buildings only happens once, namely when the initial acquisition.

Meanwhile, assets obtained through inheritance are not subject to acquisition tax. Therefore, the UN levy applies to limited ownership, control, or use of land and buildings.

He assessed that the increase in land and building value was not only the result of the owner's business. The increase in the value of tax objects that occurred a lot in Jakarta was triggered by city development, infrastructure improvements, and changes in spatial planning carried out by local governments.

"This increase in value creates new assets that deserve to be taxed so that development benefits are not only enjoyed by large capital owners," he told reporters, Monday, December 1.

According to Prastowo, without the United Nations, land ownership by high-income groups can be increasingly concentrated, while low-income people will be increasingly eliminated. Therefore, the United Nations has a strategic role to play in controlling inequality, especially in big cities with land pressure like Jakarta.

He said that the United Nations also functions to maintain the reasonable selling value of tax objects (NJOP), by setting a proportional tariff and tax burden, as well as protecting vulnerable groups and social activities.

Prastowo said the DKI Provincial Government had adopted the principle of justice in UN policies through various incentives. Among them, landed houses with NJOP below Rp1 billion are free of PBB for the first ownership, as well as a 50 percent discount for second ownership. Apartments or flats with NJOP up to Rp650 million were also released from the United Nations.

Similar relief is given to residents without a fixed income, retirees, and people affected by the condition of the palace. Foundation-based basic and medium education institutions even get tax exemptions of up to 100 percent.

Prastowo emphasized that the principles of justice as stated by MUI had actually been applied by the central and regional governments through applicable tax regulations. The UN as regulated in the UN Law and Law Number 1 of 2022 concerning Financial Relations between the Central and Regional Governments (HKPD), according to him, is an instrument to maintain the availability of public services and distribution of proportional land ownership.

Protection for the underprivileged is consistently provided. There are flexible tariff arrangements, assessment ratios, non-taxable NJOPs, and various other facilities to ensure the UN does not burden vulnerable groups," he said.

Previously, MUI issued a fatwa regarding taxes that were fair in the XI MUI National Conference in Jakarta, Sunday (23/11). The Head of the MUI Fatwa Division, Asrorun Niam Sholeh, said that the ideal tax should be imposed on assets used for productivity or is a secondary and tertiary need.

He considered that the tax collection on basic needs, including housing and residential land, did not reflect the principle of justice. MUI also provides a number of recommendations, including a review of the progressive tax burden which is considered too large, as well as an evaluation of various tax provisions in order to be in line with the principle of justice.