Using Study of Assessment-Sales Ratio (ASR) for Estimating of the Potential Loss of Property Tax in the Jakarta Greater Area

Abstract

Assessment-Sales Ratio (ASR), which is the ratio between NJOP (assessment) of the Market Value, will be used to analyze the performance of NJOP determination, and to test the level of assessment and the level of equity. Assessment performance can be expressed as good performance if it meets the following criteria:
a. the level of assessment is approaching 100% of the market value, not over-assessment nor under-assessment.
b. the variability of Coefficient of Dispersion (COD) and Coefficient of Variation (COV) are not exceeded 20% and 25%.
c. the level of equity is independent, not progressive nor regressive.
This study aims to analyze the performance of NJOP (the Tax Object Sales Value) determination, looking for solution for poor performance as well as propose an appropriate model for measuring the tax potential loss in the Jakarta Greater Area (Jabodetabek).
Based on testing the level of assessment, 13 cities / municipalities across the Jakarta Greater Area (Jabodetabek) are proven by performance of under-assessment, with a central tendency ranged from 0.610 to 0.888. The variability performance of COD, only in 4 (four) municipalities / cities was below 20%, as did the variability of COV only in 4 (four) municipalities / cities was below 25%, whereas the others exceeded that limit. Testing the level of equity proved that in the NJOP determination, 9 cities/municipalities performing regressive, a city performing progressive, and only in 3 municipalities/cities performing independent. For municipalities / cities which are underperforming (poor) need improvement or correction through reappraisal, reassessment or simply by NJOP adjustment.  With the proposed model, the potential loss of property tax (PBB P2) in 2012 is estimated to Rp1.384 billion or 24.3% of the tax potential which should be at Rp5.698 billion. 14.6% of the tax potential has been lost as a consequence of the application of mass appraisal, while 9.7% of tax potential is lost due to poor performance, including the potential loss due to the opening of the rent-seeking opportunities.