JAKARTA (TheInsiderStories) - Indonesia government released new luxuries tax regulation for property in a move to help the industry. Based on the new rule, Finance Ministry imposes tax on the assets based on the value of the asset instead of the size the house or apartment.
According to the new ruling, as set out in the Ministerial Decree No. PMK No.106/PMK.010/2015, a house and town house under the category of non-strata title with a selling price of Rp20 billion ($1.45 million) or more, as well as apartment, condominium, town house under the category of strata title and with selling price$10 billion or more will be taxed 20 percent.
Previously, the government declared that properties that are subject to luxury sales tax of 20 percent were houses and townhouses in the category of non-strata title with a building area of 350 square meters or more, as well as apartment, condominium and town house with strata title, and the likes with an area of 150 square meters or more.
The government is facing difficulties in meeting its 2015 revenues target of Rp 1,294.7 trillion, which many said was unrealistically due to high target.
In the State Budget for 2016, the government set the total expenditure of Rp 2,095.7 trillion, while revenues are set at Rp 1,822.5 trillion, leaving a State Budget deficit of Rp273.2 trillion, or 2.15 percent of gross domestic products (GDP).
In the 2015 Revised State Budget, the total government spending amounted to Rp 1,984.1 trillion, comprising of state revenues at Rp 1,758.3 trillion, consisting of Rp1,489.3 trillion in tax revenues, Rp 269.1 trillion non-tax revenues and grants at Rp3.3 trillion. This leaves state budget budget deficit of Rp 222.5 trillion, or 1.90 percent of GDP.
The 2016 State Budget was set based on basic assumptions as follows: economic growth of 5.3 percent, inflation at 4.7 percent, Rupiah exchange rate (to US dollar) at Rp 13,900 , government’s 3-months commercial paper (SPN) 5.5 percent, Indonesia crude price at $50 per barrel , oil and gas lifting 1.98 million barrels of oil equivalent per day , oil lifting 830,000 barrels per day and gas lifting at 1.15 million barrels of oil equivalent per day. (*)