"We are trying to convince the DPRD to raise BBKB tax from five percent to 10 percent," Head of Regional Finance Agency (BKD) of West Sumatra, Zaenuddin stated during a hearing with Commission III DPRD of West Sumatra and Pertamina in Padang on Thursday.
According to him, the plan is still in the stage of discussion and calculation between related parties.
If the plan is approved, the company targets Rp160 billion of proceeds per year.
He explained that the tax is only charged to non-subsidized fuel such as pertalite, pertamax, pertamina dex and pertamina dexlite.
"While fuel subsidized such as premium, diesel and diesel fuel are not changed," he said.
In 2017, the Provincial Government gets revenue from BBKB worth to Rp110 billion with a tax value of five percent.
If the tax value is increased to 10 percent, then the number of non subsidized fuel users will decrease as they will move to subsidized fuel.
We estimate that 40 percent of consumers switch to subsidized fuel and 60 percent continue to buy non-subsidized fuel so that the revenue will reach around Rp160 billion, he added. (cha)
Translator: Vicha Faradika