In Indonesia even though valuation activity has existed since Dutch colonial era, and private sector started in 1967 when the government began to invite foreign investment, the term of valuer is still not known by too many people because valuer’s service is yet to develop. Not only is valuation formal education yet to exist, because valuation science by the Department of National Education is not considered to be part of science tree, the use of valuer is usually still limited to financial institutions, such as banking institutions, investment institutions and tax institutions. Through the establishment of Indonesian Banking Restructuring Agency (IBRA), the use of valuer has become more and more popular in order to value assets of restructured banks. However, the condition of valuer in 2000 was still similar to the accountant’s service condition in 1955 whereas due to unavailability of regulations determining accountant’s quality, each person at that time could call himself an accountant. Valuer certification test (Ujian ser¬tifikasi penilai – USP) held by Indonesian Valuer Professional Society (Masyarakat Profesi Penilai Indonesia – MAPPI) in order to implement the Decree of te Minister of Finance Number 57/KMK.017/1996 is a breakthrough to provide temporary solution to determine the minimal quality that must be met for a person to be admitted as a valuer. Furthermore, this issue on valuer’s qualification must be settled with a law as conducted by other more developed countries.

Professional property valuer and business valuer (since 2008 valuer has been classified into property valuer and business valuer) provide various types of service, such as undertaking valuation on assets for various purposes, providing consultancy for clients, and participating in decision making regarding real estate / business. Indonesian Valuation Standard (Standar Penilaian Indonesia – SPI) is the guidelines that must be understood and implemented by valuer to serve as guidelines in conducting valuation.

According to Indonesian Valuation Standard 2007 valuation is interpreted as valuer professional job to provide an opinion on economic value. Valuer carries out valuation work to produce review in the forms of analyses, opinions and recommendations by presenting it in a report, so that misinterpretation by service users and the public can be avoided. Valuer presents conclusion of his valuation outcome by putting forward his opinions related to natural characteristics, quality value or use value of a certain interest or various aspects of identified real estate. Real estate valuation involves various selective research activities on comparable market area, use of sufficient analysis method, knowledge application, experience as well as professional decision and consideration making to develop an adequate solution on valuation issue.

Natural characteristics of valuation issue will give indication to determine whether or not the assignment to be completed is a valuation or consultancy assignment. According to valuation objective, value that can be estimated includes market value, insurance value, investment value, or several other types of valuation identified as interest over a real estate in a certain period. Valuation assignment can produce market valuation estimation on fee simple estates, leasehold estates, preservation easement and some other interests.

Consultancy is defined as an activity or process to provide real estate information, data analysis, and recommendation or conclusion on desertification of real estate issue, and others which are not value estimation. Consultancy assignment also includes land use study, supply and demand study, fea¬sibility study, highest and best use analysis, and marketing and / or investment consideration related to a proposal or on-going development.

In a valuation task, valuer provides the client with estimation of property real value that reflects everything related to market justification. In a consultancy task, market activity at that particular time and evidence being studied are used to make a conclusion that can be not focused on specific value indictaion. However, in both assignments, conclusion is made from suitable and appropriate data analysis in order to meet professional practice standard. To avoid misunderstanding, certainty must be obtained from the client on whether the assignment will be a valuation or consultancy one.

Three kinds of service that can be given by valuer are review, namely study / review activity or process of a report submitted by other party.

To carry out their activities, professional property valuer and business valuer require licenses and certification. Professional valuer takes various training, possesses experiences and are very much bound by professional ethic codes and working standard. Included in this group are they who undertake and carry out property valuation review. Valuer is obligated to obey and meet the regulatory requirements and is a member of a professional association providing professional activities and education development. All members obey and follow their professional ethic codes or performance and are willing to undertake peer review reflecting their high commitment to profesionalism.


Through the Regulation of the Minister of Finance Number 125/PMK.01/2008 dated 8 September 2008, the Decree of the Minister of Finance Number 57/KMK.017/1996 regarding Valuer Service has been voided. This Regulation of the Minister of Finance regulates, among others, that:

(1) Valuation Service covers:
a. Property Valuation Service; and / or
b. Business Valuation Service.

(2) Property Valuation Service as mentioned in point (1) letter a consists, among others:
a. land and building together with their facilities, as well as other development on the land;
b. installation and equipment that is assembled and / or standalone used in production process;
c. means of transportation, heavy equipment, communication devices, medical devices, laboratory equipment as well as office utilities, equipment and furniture, and military equipment;
d. agriculture, plantation, livestock, fishery, and forestry;
e. mining.

(3) Business Valuation Service as mentioned in point (1) letter b consists, among others:
a. Business entity;
b. Equity;
c. Stocks / securities, including their derivatives;
d. Company rights and obligations;
e. Intangible assets;
f. Economic loss / damage due to a certain activity or event to support various corporate actions or on material transactions;
g. Normality opinion.

(4) In addition to services mentioned in points (2) and (3), Public Valuer can provide other services related to Valuation activity, such as:
a. property development consultation;
b. asset information system design;
c. property management;
d. business feasibility study;
e. property agent service;
f. project funding control.

Public Valuer License is classified into:
a. Property Valuation; and / or
b. Business Valuation.

To obtain the license, valuer submits a written application to the Secretary-General attention to the Head of the Center for Accountant and Valuer Service Development by meeting the following requirements:

a. Domiciled in the territory of the Republic of Indonesia proven with an Identification Card (ID Card) or other proofs according to the regulatory terms and conditions;
b. Having at least Bachelor’s Degree or its equivalent, proven with a diploma from the issuing education institution;
c. Being a member of a Professional Association proven with a member card or statement letter from that particular Professional Association c.q. MAPPI (Indonesian Valuer Professional Society);
d. Passed in Valuer Certification Test according to the applied license clarification proven with testimonium of Valuer Certification Test from MAPPI;
e. If the date of passing the Valuer Certification Test as mentioned in letter d has exceeded 2 (two) years, a proof of participation in Advanced Professional Education (Pendidikan Profesional Lanjutan – PPL) for at least 50 (fifty) PPL Credit Unit (SKP) in the past 2 (two) years must be submitted;
f. Having working experience in Valuation which is in accordance with the classification of license application proven with a statement letter from the Management or KJPP Associate Management where the incumbent works, at least 3 (three) years for applicant with Bachelor’s Diploma or at least 1 (one) year for applicant with Master’s Diploma in Valuation;
g. Working experience as mentioned in letter f should be at least 600 (six hundred) hours as Valuer and 200 (two hundred) of it as Team Leader;
h. Having Tax Payer Identification Number (NPWP);
i. Never been imposed with revoking of Public Valuer license; and
j. Submitting an application letter, completing an application form for Public Valuer license, preparing a letter duly attached with sufficient duty stamp stating that he / she does not assume double jobs / occupations, and preparing a letter duly attached with sufficient duty stamp stating that the required data submitted are true by using a format as mentioned in Attachment I to the Regulation of the Minister of Finance.

KJPP legal entity can be in the forms of:
a. Individual; or
b. Partnership.

KJPP which is an individual legal entity as mentioned in letter a can only be established and run by a Public Valuer who is also a Leader (Management).

KJPP which is a partnership legal entity as mentioned in letter b is a civil partnership or firm.


Even though the valuation concept is the same and valuers in many countries follow international valuation standard, implementation of the basic concept will be different. Valuer must understand and use the concept and procedure in accordance with his authority where the valuation will be used.

The United States uses USPAP as general valuation stan¬dard to differentiate full valuation from limited valuation (in America there are 9 valuer professional associations that have their own standard, but take USPAP as a general / uniform standard which must be followed by all association members, so that there is a tendency to merge into one professional association only). Comprehensive valuation is valuation that meets the Departure Provisions regulated under USPAP. Meanwhile, limited valuation is estimation of value undertaken in accordance with the Departure Provisions. Departure Provi¬sions state that a valuer can enter an agreement to carry out required valuation which is less than or different from the assignment required by specific guidelines, but prior to signing of the agreement:

1. Valuer has determined that the service to be conducted is not so limited that can cause the assignment to have the tendency to mislead or confuse the client and users of the report;

2. Valuer has given advice to the client that valuation implementation will not meet the requirements under the valuation guidelines and the report will identify and explain the beginning of the valuation;

3. The client has agreed that the outcome of the limited valuation or consultancy service is sufficient.

Valuation report that presents full or limited valuation can be presented in 3 forms, namely self contained report, sum¬mary report, and restricted report. Self contained report comprehensively explains the data and analysis used in the valuation assignment. All information needed is presented in the report and is not a reference that becomes valuer’s file / archive. Summary report is a report presenting data briefly and analysis summary used in the valuation. Restricted appraisal report only presents conclusion of the valuation. The archive / file kept by valuer must not only consist of valuer paper work, but also at least all data and analyses presented in self contained report.


Work assignment accepted by valuer can be classified into valuation work, whose objective is to obtain value estimation on interest in a real estate, or consultancy work, namely to carry out analysis or provide consultancy with regard to decision to be made on a real property. Objective and intention of valuation are determined by client. To idenftiy them, client needs to be asked to answer several specific questions related to real property. If client’s questions are cleariy understood, the objective of valuation can be described according to the requested information.

In case the value estimation is needed in valuation, types of requested value must be defined from the beginning. The requested value can be market value, insurance value, going concern value, assessed value, use value, investment value or other types of value. Valuation purpose is the base of conclusion of final value that does not change to accommodate valuation use. The structure of valuation report is done in accordance with the intention of value estimation use, yet the valuation itself will never change. For example, valuation on property in the form of residential / house that can be reported to facilitate house sales or mortgage, such limited valuation is for rehabilitation or litigation purposes. Whatever it is, the rupiah figure of the value is the same

The use or function of valuation is a way / style where client uses information available in valuation report. The use of valuation is determined by client’s needs. For example, client wants to know market value of a residential / house to avoid overpaying or giving too cheap sales price. Client, which is a company, needs information on occupational rate or available tendency on population in an area to determine the feasibility to relocate there. Insurance company and population may be curious on the insurance value of building, and developer may require to identify supply and demand factor in a community before constructing a complete apartment.

Because valuation provides base for decision making related to real property, valuation use depends on the decision to be made by client. In determining valuation issues, valuation should take into account client’s requirements and produce an agreement acceptable by both parties and be consistent with applicable professional valuation standard.

A valuer might be asked to carry out various assignments. Use of valuation requested by client might be as listed down.

In terms of transfer of rights, the uses of valuation are to:

 Help buyer having the prospect to determine demand price.
 Assist seller to decide on acceptable sales price.
 Give a foundation for real property exchange.
 Provide a foundation to conduct reorganization or merger of ownership of various properties.
 Decide on requirements of sales price in proposal for transaction.

Funding and credit:

 Give estimation on value of stocks offered to submit mortgage proposal.
 Provide a strong foundation for investor to make a decision before purchasing mortgage, obligation, or other stocks.
 Give a foundation for insurance closure or provision of collateral for real property credit.


 Decide on property value estimation before being acquired.
 Determine value estimation after being acquired.
 Decide on damages after being acquired.
 Decide on value estimation in dispute about contract.
 Determine real estate market value as part of the portfolio.
 Determine market value of partnership interest.
 Determine estimation of damages incurred by environmental / environmental impact assessment breach.
 Decide on value of damages due to polluting incident.


 Determine tax value estimation.
 Decide on assets imposed and not imposed with depreciation and to decide on depreciation value.
 Determine real estate component value to find out future profit and its tax.
 Decide on value of prize goods and their tax.


 Determine lease payment schedule and sales-purchase terms and conditions.
 Decide on the feasibility of construction and renovation programs.
 Assist company and third party in house purchase for the needs of their employees.
 Meet the needs of insurance company, adjuster and policy holders.
 Facilitate merger, share issuance and book value revision.
 Provide liquidation value estimation for sales or auction.
 Determine the tendency of supply and demand in the market.
 Determine the status of a real estate, etc.


An integral part of valuation process is government’s involvement in rural management that requires use of property tax and infrastructure arrangement such as railways, roads, tunnels, public bus terminals, etc. which needs public-owned property acquisition and compensation provision. Those activities are backed up by Land Affairs Law regulating that land acquisition for public needs must be done through amicable discussion with adequate compensation so that market valuation estimation through professional valuation is needed. Public-owned land acquisition is a implementation of domain eminent owned by the government and the implementation is referred to as condemnation.

At the same time, especially in fulfilling the needs for residential in urban area that develops so rapidly, investment in real estate is acknowledged by law as potential investment that can give good result; however, due to its nature, it demands special financial support and also reliable inputs or opinions on the real property value.

a. Valuation for Auction

For auction the government will also carry out valuation on collateral goods submitted by the debtor upon submission of their loan application to the bank. For collateral goods of debtors who breach the agreement, the arrangement of loan payment will be done by government institution through an auction of collateral goods organized by the committee for state receivable affairs. In auction, often times the value is determined internally without using licensed valuer.

Point (2) of Article 230 regulates that if valuation object is specific and or intangible, valuation is done by External Valuer. While valuation on object which is not specific and or tangible can be done by External Valuer upon proposal and funding by receivable giver (point 3 Article 230).

Regarding valuation report, point (1) of Article 241 mentions that valuation report submitted by receivable giver can be used as guidelines in deciding on valuation value providing that:
1. The valuer appointed by receivable giver is an independent Valuer or Valuer Company.
2. The Valuer or Valuer Company have legitimate license from an authorized institution to carry out valuation activity in Indonesia.
3. Valuation report must be signed by a Valuer with valuation practice certificate.

b. Valuation of regional government assets for asset inventory and preparation of regional asset balance sheet

To implement the provisions of Article 112 of Law Number 22 Year 1999 regarding Government which was changed to Law Number 32 Year 2004 regarding Regional Government and was finally changed to Law of the Republic of Indonesia Number 12 Year 2008 regarding Second Amendment to Law Number 32 Year 2004 regarding Regional Government, Decree of the Minister of Home Affairs Number 12 Year 2003 regarding Regional Asset Valuation Guidelines was issued. Article 12 mentions that regional asset valuation can be done gradually in accordance with the regional financial capability. Regional Asset Valuation Mechanism is conducted according to Valuation Standard acknowledged by the Government. Article 7 of the Standard mentions that:

1. Regional Asset Valuation is conducted by a certified Independent Institution in asset valuation, according to laws and regulations.
2. Independent Institution as mentioned in point (1) is appointed by the Head of Regional Government.
3. The appointment of the Independent Institution as mentioned in point (2) is according to laws and regulations.

Who is referred to as certified Independent Institution in asset valuation? This is what often becomes a problem because it is often times understood partially. The correct interpretation is that the independent institution is a valuation company having a business permit from the Department of Finance, that possesses valuer sufficiently licensed by the Department of Finance to the extent that if regional government assets consist of land, buildings and other tangible assets, like cars, furniture, etc.; the valuation must be done by a licensed valuer whose expertise is asset valuation. On the other side, if the assets do not only consist of tangible assets, but also equity or legal entity, either regional-government-owned enterprises (BUMD) or others, the valuation company must also have licensed valuer whose expertise is business valuation.

Article 10: The Outcome of Regional Asset Valuation is used for the purpose of formulation of Regional Balance Sheet in the first place, and can be used for other purposes, such as Regional Loan, Insurance, Change in Legal Status, Use of Regional Assets, etc. Regional asset valuation result contains value estimation of regional assets whose data are clear enough, using a certain date containing relevant calculation analysis outcome as guidelines, to support valuation activity.

To prepare regional government balance sheet, the Regional Government also carries out valuation for land acquisition to undertake police power and build public facilities, such as school, ter¬minal, road, etc. In connection with the implementation of the assignment, community member whose land is required for such purpose must let go his property to be used for public facilities; however, it must be treated humanely in the implementation of land acquisition. The calculation of compensation should refer to the result of valuation undertaken by independent Valuer so that fair compensation for all involved parties can be obtained.

Besides that, in undertaking its police power, the government can also apply the requirements of Environmental Impact Assessment for a building activity or construction so that it will not disturb public interests.

c. Valuation for the purpose of Land and Building Tax (PBB) and Penilaian Acquisition Duty of Right on Land and Building (BPHTB)

Provisions of point (3) of Article 1 of Law Number 12 Year 1994 regarding Land and Building Tax (PBB) stating that Sales Value of Taxable Object (NJOP) is the average price obtained from a sales-purchase transaction that occurs normally, and if there is no sales-purchase transaction, Sales Value of Taxable Object (NJOP) is decided through price comparison to other similar objects, or new obtained value, or substitute Sales Value of Taxable Object (NJOP).

Explanation of point (3) of Article 1 states that what is referred to as price comparison to other similar objects is an approach / a method to determine the sales value of a taxable object by comparing it to other similar taxable objects whose locations are close to each other, functions are the same and sales prices are known. Meanwhile, what is referred to as new obtained value is an approach / a method to determine the sales value of a taxable object by calculating all costs spent to obtain that object at the time of valuation deducted with depreciation based on the physical condition of that object. Furthermore, substitute sales value is an approach / a method to determine the sales value of a taxable object based on the production result of that taxable object. The above-mentioned Law has been replaced by Law Number 28 Year 2009 regarding Regional Tax and Regional Retribution which entrusting the management of Land and Building Tax for Rural and Urban areas to the regional governments in regency and municipality. The transfer of Land and Building Tax will be fully executed on 1 January 2014. Valuation for the determination of Sales Value of Taxable Object (NJOP) is generally a mass valuation by determining several valuation zones indicating same average value for properties located in the same zone.

The provisions of that law are among others regulated by the Decree of the Minister of Coordinator for Development Supervision and State Apparatus Adminstration Affairs Number 30/KEP/PMK.WASPAN/8/1998 regarding Land and Building Tax Valuer Functional Position and Its Credit Points. Poin (21) of Article 1 mentions that valuation of land and building tax is an activity by the Directorate General of Taxes to determine Sales Value of Taxable Object (NJOP) that will be used as the base of tax imposition, by using market data approach, cost approach and income approach.

In such valuation, the valuation is mass valuation which is defined by the provisions in point (22) of Article 1 as a systematic valuation method, which uses a standard procedure on several objects, applied at a certain time together with computer assistance. In addition, individual valuation is defined by the next point as a valuation method on taxable object by taking into account all characteristics of each taxable object. Individual valuation can be applied to certain taxable objects with high value or whose existence has specific characteristics. The application of mass valuation cannot be separated from the fact that the total number of Land and Building Taxable Object is large and spreads throughout the archipelago, while the number of tax officers capable to carry out the valuation is very limited. This mass valuation is indeed practical, yet it has several drawbacks. The main one is that mass valuation, whose application by creating valuation zones which will result in an Average Indication value (NIR), will cause the estimation value to be inaccurate because it does not reflect the real property value so that it cannot be accepted as market value. That is caused by the characteristics that each land parcel is unique so that even a land parcel is located on the same street and adjacent to each other, but the value can be different especially if it is located in the corner with more accessibility, while the other land parcel is located in the middle (look at the example of valuation application by comparing sales data / market data comparison).

On a related matter, the Decree of the Minister of Finance Number 384/KMK.04/1998 regarding Re-Valuation of Company Fixed Assets determines that re-valuation of fixed assets is done based on the proper value of fixed assets at the time of valuation, which is determined by Valuatino company or Valuer acknowledged by the government. What can be expected by the company from the re-evaluation and can those expectations can be met?

In the case of value increase, the discrepancy of value is the object of value added tax so that the tax must be paid to the government.

d. Land and Building Tax Valuation Practice by the Directorate General of Taxes
Steps in the activity to determine Sales Value of Taxable Object (NJOP) especially land are as follows:
1. Collection and Up Dating of Property Transaction Data / Sales Price Data, whose information sources from property agent, Land Notary / Non-Land Notary, mass media and public information.
2. Analysis to collected Transaction Data:
1) Re-adjustment of type of data, taking into account transaction data available in the market, is presumed to have distorted so that it become unreliable.
2) If Transaction Data consist of Land and Building, they will firstly be deducted with Building Value. The analysis result is expected to produce Land sales price reflecting the actual Property Market Value.
3. Establishment of Property Market Value Data Bank especially in the urban area:
1) The above analyzed transaction data are managed to become Property Market Value Data Bank.
2) Land Value Information in Property Market Value Data Bank will be used as reference object / value reference for the analysis of Average Indication Value (NIR) / Land Value Zone (ZNT).
4. Analysis of Average Indication Value (NIR) / Land Value Zone (ZNT)
1) Prepare a concept of Map for Land Value Zone (ZNT) based on area indication considered to have same value.
2) Analysis of Average Indication Value (NIR) is undertaken through time adjustment, accessibility to reference object / value reference available in Property Market Value Data Bank.
3) Area indicating to have same Average Indication Value (NIR) will form 1 (one) separate zone namely Land Value Zone (ZNT) and will be given certain code.
4) Land Value Zone (ZNT) Code is unique (not the same) in 1 (one) block.
5) Finalization of Average Indication Value (NIR) / Land Value Zone (ZNT) depends on the level of regional economic development / growth.
6) Ares with significantly dynamic economic development / growth, like urban area, will be improved every year. While areas with common development will be improved every three years.
5. Classification of Average Indication Value (NIR) to become Sales Value of Taxable Object (NJOP):
1) Is based on the Decree of the Minister of Finance Number 523/KMK. 0412000
2) Aims to simplify tax procedures.
6. Community involvement:
1) Community as Stakeholder is involved in the determination of Sales Value of Taxable Object (NJOP), through presentation by Land and Building Tax Office (KP.PBB) to / amicable discussion with community elements, such as Village Council, Head of Village, Head of Neighborhood, local Community Figures, on the outcome of Sales Value of Taxable Object (NJOP) determining process.

2) Notification to the Head of Regional Government and Relevant Institutions (Offices of Land Affairs, Forestry, etc.) for them to give inputs.
3) Outcomes in the forms of Agreement on Land Sales Value of Taxable Object (NJOP).
7. Proposal of the Decree of the Regional Tax Office
1) Land and Building Tax Office (KP.PBB) proposes to the relevant Regional Tax Office to obtain approval.
2) Land Sales Value of Taxable Object (NJOP) approved by the Regional Tax Office can be used as the Base of Land and Building Tax imposition for the Current Tax Year.

e. Determination of Building Value

Building value is decided through analysis of new building construction cost by taking into account its depreciation value. Considering the vast number of taxable objects for Land and Building (PBB) which spreads throughout the territory of Indonesia, whereas on the other hand the available number of valuer resources and valuation time is very limited, valuation is carried out in 2 (two) ways, namely mass valuation and individual valuation.

In mass valuation, Land Sales Value of Taxable Object (NJOP) is calculated based on Average Indication Value (NIR) found in each Land Value Zone (ZNT), while Building Sales Value of Taxable Object (NJOP) is calculated based on Building Component Cost List (Daftar Biaya Komponen Bangunan – DBKB). The calculation of mass valuation is done using Computer Assisted Valuation (CAV). CAV is a valuation method to decide the amount of Sales Value of Taxable Object (NJOP) by using computer assistance based on given criteria.

Individual valuation is applied for taxable objects with (certain) high value, not only specific ones, but also general ones, that have been valued with CAV, but the result does not reflect the actual value due to the limitation of the program application. Individual valuation can be implemented by taking into consideration all characteristics of that taxable object. In individual valuation, data are collected using SPOP and SPOP Attachment (LSPOP) as well as Specific Object Work Sheet (Lembar Kerja Objek Khusus – LKOK) for additional data or information.

Each valuation must pay attention to valuation date which becomes the base of Land and Building Tax (PBB) decision namely per 1 January of the pertinent tax year as regulated under point (2) of Article 8 of Law regarding Land and Building Tax. Thereby, although data collection is not done exactly on 1 January, valuation analaysis must be made in accordance with the condition of taxable object on 1 January of the current tax year.

To make the Land and Building Tax (PBB) calculation easier, valuation result both for land and building, will furthermore be classified and categorized based on the amount of Sales Value of Taxable Object (NJOP) per m2. For land there are 50 (fifty) classifications, while for building there are 20 (twenty) classifications. Classification of Sales Value of Taxable Object (NJOP), both for land and building, is finally regulated under the Decree of the Minister of Finance Number 523/KMK.04/1998 regarding the Determination of Classificatio and Amount of Sales Value of Taxable Object as a base for Land and Tax Buildng (PBB) impositon.

Dimension, shape and geographic location of a taxable object can be presented in a supporting datum, namely map. Even though it is not clearly stated in the elements of SISMIOP, the existence of a map can be extracted from SISMIOP elements as follows:

1. Taxable Object Number (Nomor Objek Pajak – NOP), namely numbering system to provide a unique, fixed, and standard identity for all taxable objects. One of the objectives of Taxable Object Numbering is for easy searching of taxable object location / position, by using the map as the guidance and referring it to the map (block map);

2. Block, namely grouping of land parcels as a location direction and facility to identify taxable object. Representation of the above is illustrated in block map, which consists of identifiable block code, block borders, borders of taxable object areas, and other details, and in village map, which shows the position of each block in a village territory;

3. Land Value Zone (ZNT), is a geographic zone consisting of a group of taxable objects with one Average Indication Value (NIR). This Zone is used as an identification facility for land taxable object value. And as mentioned previously, all information related to geographic location must be shown on the map.

From the above descriptions it can be concluded that spatial data in the form of map is a component that must be present in SISMIOP or, in other words, it can be said that the base of Land and Building Tax data is SISMIOP structured if consisting of maps (territorial map, village map, block map, Land Value Zone (ZNT) map, etc.). The functions of map in Land and Building Tax collection can be detailed as follows:

1. Identifictaion of location, size, and total area of taxable object presented on a block map;
2. Representation of Land Sales Value of Taxable Object (NJOP) claridication mentioned in Land Value Zone (ZNT) map;
3. Territorial / area development framework presented in a territorial map and village map;
4. Land and Building Tax (PBB) SIG input.

One of the standards for data collection performance is through coverage ratio, namely the ration between total area that has been imposed with Land and Building Tax (PBB) and the total area that can be imposed with Land and Building Tax (PBB) (taxable area). The higher the Land and Building Tax (PBB) coverage ratio is of an area, it illustrates the higher number of area that has been included in the data or registered and imposed with Land and Building Tax (PBB). The data of 1997 show that Land and Building Tax (PBB) coverage ratio of the entire sectors nationally was only 71%. This means that almost 30% of existing potential Land and Building Taxable area was yet to be included in the data or registered and imposed with Land and Building Tax (PBB). Thereby, exisiting Land and Building Tax (PBB) potential to improve Land and Building Tax (PBB) basic decision is still quite strong, especially from the taxable objects in the forms of land and building which are supposed to be imposed with Land and Building Tax (PBB). Based on the coverage ratio of each sector, rural and urban sectors have the lowest percentage compared to other sectors, so that data collection activity for the creation of data base in those two sectors must be improved. Each regency and municipality whose revenue target is very small, such as Mappi Regency in Papua, is required to improve their coverage ratio so that their Land and Building Tax (PBB) revenue can be sufficiently increased. Same thing applies for areas with similar characteristics or conditions to Mappy Regency. For areas which are rapidly developed, such as Jakarta and other big cities whose changes in land and building use can change so rapidly, the biggest challenge is how far the regional government can accommodate the changes so that the value of Land and Building Tax (PBB) can be truly equally with the property value.

The next question will be whether or not the valuation practice as done by the Directorate General of Taxes must be followed? The answer depends on the question if the desired Sales Value of Taxable Object of Land and Building Tax (NJOPBB – Nilai Jual Obyek PBB) really reflects market value because all this time there has been misunderstanding that Sales Value of Taxable Object (NJOP) reflects the market value of taxable object. Whereas the nature is very casuistic because in an area there is Sales Value of Taxable Object (NJOP) that already equals to market value, but in big cities Sales Value of Taxable Object (NJOP) is usually below market value, while plantations which are probably valuated individually could mostly have Sales Value of Taxable Object (NJOP) value above market value. Does that problem incur because mass valuation calculation is done by using Computer Assisted Valuation (CAV) which is apparently proven to be inaccurate and does not reflect the actual value?

Example of How to Calculate Sales Value of Taxable Object (NJOP)