Indonesia has some of the most progressive tax systems in the world, but it has been slow to get on top of a global trend of taxing capital.
That’s where Jakarta comes in.
In Indonesia, capital gains and losses are taxed at the same rate as personal income, which can be anywhere from 25 to 70 per cent.
However, the country’s top earners get preferential treatment.
That means you can only get a maximum of about 1,000 baht per day for capital gains.
That means if you have an investment income of more than $200,000, you’ll pay only 50 bahts per day.
If you make more than that, you will get 100 bahtis per day, but you won’t be able to deduct expenses.
The capital gains tax rate is set at 50 per cent, but some regions in the country also set their own rates.
The highest is in Kalimantan, which has a capital gains rate of 90 per cent while in the North Sulawesi region, the rate is 50 per a cent.
The rate in the capital city of Jakarta is 30 per cent and it is set to go up to 50 per per cent in 2017.
What’s more, if you are a resident of the capital region, you have to pay the equivalent of 15 per cent of your annual income on the capital gains taxes.
That includes your income from selling goods or services, as well as income from renting property.
As the government is only allowed to levy capital gains on individuals, those in the regions are left with little choice but to pay tax on the income they earn from renting or selling properties.
In order to do so, most cities and provinces in Indonesia are collecting property taxes from the region and applying it to the local council.
This allows local governments to collect taxes on land and real estate, as much as 90 per 50 per 100 sq km.
This tax is not subject to taxation in Jakarta.
“If you’re a resident in the Jakarta region, if your house is worth more than the average income of a resident, then the municipality will not tax the house, but the council will,” said Abul Kadir, an economist at the Jakarta University of Economics and Business Administration.
“There is no capital gains, there is no property tax, there are no taxes on other sources of income, and the council can collect tax on these things.”
The Jakarta council collects taxes on these property and land taxes and uses this revenue to fund its social programs.
The council also collects other taxes such as road tolls, utility and income taxes, but those are not subject the same tax rates as property taxes.
Jakarta’s property tax rate has been increasing every year since 2013, but there is a limit on how much it can go up in the future.
The limit was increased to 50 percent in 2017 from 25 percent.
However, Kadir says there are some cities that have gone beyond that limit, and they have taken steps to bring in a new tax.
“These cities have taken the initiative to raise taxes on their properties, to bring taxes on the property taxes that they collect from the council, so that these are the only taxes they are able to collect,” he said.
That is the case in Bintang, where the city’s property taxes are expected to rise from $6 million to $10 million by 2020.
“So now the council has a tax revenue that it is able to spend to build public infrastructure and the capital expenditure,” Kadir said.
The council will also be looking at how to increase property tax rates in Jakarta, which are set to double in the next four years.
However it is unclear whether the new tax on land is a result of the city council taking a more progressive approach to taxes.
“We can’t say if it’s the council taking more progressive action or if the city itself has a more liberal attitude towards taxes,” Kadil said.
“I am sure that some of them will change their approach to the taxes they collect.”
Jakartans in the region are expected have their property tax revenue collected from 2020.