Analysis of Land and Building Tax's Incentive to Building Cultural Preservation in Yogyakarta City, Indonesia
14 Pages Posted: 14 Jan 2017
Date Written: November 30, 2016
Indonesia is a country well-known for its tourist paradise. One notable destination is the city of Yogyakarta, the second tourist destination in Indonesia after Bali. Yogyakarta is known as a special region in Indonesia referred to as a special region of Yogyakarta. Yogyakarta as one of the world heritage city, has hundreds of historic buildings in the area of cultural heritage. UNESCO appraise Yogyakarta as a city that has a good effort towards the preservation of cultural heritage objects. On the other hand, the local Government of Yogyakarta gives its great attention on improving the development of the city. There is an understanding that the development of the Yogyakarta will have big impact on its position as a city of culture. One of the support provided by the Yogyakarta City Government to encourage owners of cultural heritage preserve is to provide incentives of Land and Building Tax toward Heritage Buildings/Cultural Heritage Building. Land and Building tax is one of local revenue area in the local budget. Land and Building Tax’s incentive aims to support the owner/manager of Heritage Buildings/Cultural Heritage Building in his tax payments. The amount of incentive funds can be budgeted up to 1% of the revenue target of Land and Building Tax in the current fiscal year. This study analyzes the tax incentive in Yogyakarta City. The analytical method used is descriptive qualitative analysis. The analysis conducted on the amount of the incentives and evaluate the magnitude of such incentives. Data obtained from the archives of the Department of Regional Tax and Financial Management of Yogyakarta City, Financial Statements and official website of the City Government of Yogyakarta, as well as other related websites. The amount of the incentive will compare with the tax target in the regional budget of the year, then analyzed its effectiveness. In the period 2011-2015, the tax incentives averaged 75.78% of the target or Rp316.494.000, - per year. According to the source, unsuccessful 100% realization of the target incentive tax is due to rounding in the calculation process. In nominal terms, on some objects, the value of the incentive is quite small. Actually there is a chance to increase the realization of the tax’s incentive which is equal to the existing gap, i.e an average of 24.22% per annum of the target incentive that is Rp100.522.554,00. It required a new formula or new policies, for example to revise the regulation so the tax incentives could be more than 1% against to the Land and Building Tax target.
Keywords: Herritage building, culture herritage building, Land and Building Tax, tax incentive, preservation of cultural heritage objects
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