Jakarta government plans to increase parking tariffs and possibly vehicle tax by 10% in bid to reduce traffic

Traffic on Jalan Thamrin in Jakarta. Photo: Coconuts Media

One of the frustrating ironies of Jakarta’s hellacious traffic situation is that, while many of the capital’s major roads could be mistaken for parking lots during rush hours, the city makes very little money from actual parking. Despite higher parking tariffs having the dual benefits of decreasing private vehicle usage and increasing government revenues, the Jakarta government has not increased parking rates in years, but it plans to finally implement a 10% increase on rates this October in a belated bid to reign in the macet.

“The growth of private vehicles in Jakarta is becoming increasingly unstoppable,” Jakarta Provincial Government Secretary Saefullah told reporters at City Hall today as quoted by Wartakota, noting a study that showed that one out of four Jakarta residents owns a car and one out of every two owns a motorcycle.

Saefullah said that parking rates would increase by 10 percent this October (They are currently Rp 2,000 per hour for motorcycles and Rp 5,000 for motorcycles). He noted that, for the average person, parking a car for 8 hours per day would be significant.

“One-time parking (rates) will reach up to Rp 50,000. Then people will think twice about using their vehicles and taking public transportation instead,” Saefullah said.

The head of the Jakarta Department of Tax and Levy (BPRD), Edi Sumantri, said that there were also plans to change the 2010 regulation on motor vehicle taxes to impose 20% rates on vehicle purchases instead of the current 10%.

Edi said that government data showed that 900 new four-wheeled vehicles were hitting Jakarta’s streets every day, as well as up to 1,400 motorcycles, and a higher tax rate and increased parking tariffs could significantly decrease that number.

The BPRD also mentioned that the government currently makes around Rp 50 billion per month and the increased parking tariffs could bring in much more needed revenue.

While increasing official parking rates is certainly a good idea, a big problem in Jakarta is that a huge percentage of the money paid for parking in the capital goes towards parking preman, thugs who unofficially control on-street parking in certain areas of the city and generally belong to organized crime groups that control parking throughout the city. Former Jakarta Governor Ahok attempted to increase the number of on-street electronic parking meters to combat this, but deputy governor-elect Sandiaga Uno has suggested his administration will not further that policy, saying parking meters were not part of Jakarta’s “local culture”.

Frankly, such small increases in parking tariffs or even the vehicle tax rate don’t seem like they have any shot at denting Jakarta’s increasing macet madness. Major improvements like the mass rapid transit system (MRT) and the eletronic road pricing (ERP) systems are desperately needed to prevent Jakarta from becoming one big parking lot.

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