Deputy Governor Of DKI Admits Regional Revenue Will Reduce Due To PBB-P2 Incentives

A densely populated residential area with a backdrop of skyscrapers and apartments in the Setiabudi area, South Jakarta, Sunday (30/1/2022). ANTARA/Dewa Ketut Sudiarta Wiguna

JAKARTA - Deputy Governor of DKI Jakarta Ahmad Riza Patria admitted that regional income would be reduced as a result of the policy of providing incentives for Rural and Urban Land and Building Tax (PBB-P2) at the sale value of tax objects (NJOP) below Rp. 2 billion which were given free of charge.

However, Riza emphasized that the policy could benefit the community.

"There is indeed a reduction, but it is not commensurate with the benefits provided. The provincial government is an organization that does not seek profit, but protects the community," Riza said at the Jakarta City Hall as reported by Antara, Tuesday, June 14.

However, Riza also said that the PBB-P2 incentive policy will not interfere with the realization of regional revenue receipts because regional income does come from various sectors.

"There are many other sources of income, if the people are calm and comfortable, there are other sources of income as well," he said.

There is also the NJOP limit which reaches a limit of Rp. 2 billion, Riza said that this is the result of the carefulness of the DKI Jakarta Provincial Government who sees that land prices in Jakarta are currently experiencing a significant increase.

"Our community must be our main concern, especially those who can't afford it, there is support from the provincial government in the form of tax incentives with exemption from paying PBB taxes," he said.

Despite issuing such a policy, Riza stated that the policy would not burden the Acting Governor of DKI, who will replace Anies Baswedan in October 2022.

"No, it will not burden the acting governor," he said.

Previously, the DKI Jakarta Provincial Government provided tax incentives, one of which exempted the Rural and Urban Land and Building Tax (PBB-P2) on houses with a tax object selling value (NJOP) below Rp2 billion.

This is stated in the Governor's Regulation Number 23 of 2022 concerning the Policy for the Determination and Payment of Rural and Urban Land and Building Taxes as an Effort for Economic Recovery in 2022.

"As is well known, regional taxes have an important role in the life of the state, as a source of regional revenue that is used to finance all regional expenditures," said DKI Jakarta Governor Anies Baswedan in an official statement received in Jakarta, Sunday (12/6).

Anies assessed that in the era of the pandemic, the government needed a large budget as an effort to contain the spread of the COVID-19 outbreak and economic recovery, including in DKI Jakarta.

Therefore, Anies explained that the regulation was issued as a form of the DKI Jakarta Provincial Government's concern for the people of Jakarta and to restore the economy through local taxes.