The transfer of the State Capital from DKI Jakarta to the Nusantara Capital City (IKN) can be funded from a variety of sources, including the private sector, creative financing, and taxes or special fees determined by the authorities, in addition to the State Budget (APBN).
In total, there are 13 types of fees and special taxes that can be applied to IKN, ranging from motor vehicle taxes, and cigarette taxes, to taxes on certain goods and services.
This is as stipulated in Government Regulation (PP) Number 17 of 2022 on funding and budget management in the context of preparations, development and relocation of Capital City and the implementation of the Special Administration of IKN.
In the regulation which takes effect from the date of promulgation on 18 April 2022, the IKN authority can determine the types of fees and taxes after obtaining approval from the Indonesian House of Representatives.
Types of Nusantara Capital City special tax:
- Motor vehicle tax
- Duty on transfer of motor vehicle names
- Heavy equipment tax
- Motor vehicle fuel tax
- Surface water tax
- Cigarette tax
- Rural and urban land and building tax
- Fee for the acquisition of rights on land and buildings
- Certain goods and services taxes:
- Food and/or beverages
- Electric power
- Hospitality services
- Parking services; and
- Arts and entertainment services
- Advertisement tax
- Groundwater tax
- Tax on non-metal minerals and rocks
- Swallow's nest tax
Meanwhile, the types of special fees that can be set by the IKN authorities include fees related to the provision of certain services, such as public services, provision of goods or services and those related to the granting of certain permits.
The types of public services referred to include health services, cleaning, parking on public roads, markets and traffic control. Meanwhile, the provision of goods or services includes:
- Business sites such as markets, wholesalers, shops and other business sites.
- Places for fish auctions, livestock and forest products
- Off-street parking sites
- Place of lodging or rest house
- Port service
- Recreation, tourism and sports places
- Crossings of people or goods using water vehicles
- Sales of IKN Authority's business products
- Utilization of assets in the control of the IKN Authority
Then services related to the granting of permits that may be subject to special fees include:
- Building permits
- The employment of foreign workers
- Community mining management
The IKN Authority has the option of determining the amount of the special fees in rupiah value units uniformly or differently for each type of fee.
The House of Representatives' Approval
In determining the provisions regarding such special taxes or fees, the IKN authority must refer to the Law (UU) regarding local taxes and regional retribution that apply after the position and function of the State Capital is officially transferred from DKI Jakarta to the Nusantara Capital City by the President.
The IKN Authority is also entitled to provide incentives in the form of relief, reduction, exemption, and deferral of payments for these special fees or taxes and be authorized to apply special fees or taxes.
These incentives can be imposed either on the principal or on sanctions that arise related to the imposition of taxes or special fees.