the Globule finally admits they were wrong, and that the restaurant VAT story was a non-story ...Consumers Break Even in Confusion Over Vallue Added Tax
Call it the mystery of the value-added tax. Or the case of the tax break that wasn’t. But whatever you call it, know that if you are waiting for local restaurants and pubs to stop tacking a 10 percent value-added tax onto your bill, it is not going to happen.
Consumer advocates have been up in arms in recent weeks because local restaurants and watering holes are continuing to levy the 10 percent tax, even though the government officially abolished it, effective from April 1.
The government passed Law No. 42, 2009, on VAT and Sales Tax on Luxury Goods last year. It states that from April 1 this year, VAT should not be paid on commodities such as food and beverages sold in hotels, restaurants or stalls, whether it be dine-in or takeout.
The Indonesian Consumer Protection Foundation (YLKI) complained on Tuesday that businesses were still imposing the additional charge despite the revocation of the tax.
YLKI’s head of consumer advocacy, Tulus Abadi, blamed the government for not informing the public about the new law.
“If consumers are well informed about it, they can complain to the restaurants for still charging the tax,” Tulus told Okezone.com.
“When the government said that VAT had been erased, restaurant owners should not charge consumers anymore because it’s considered illegal. Besides, who will they pay the VAT to because the law has changed,” he said.
David ML Tobing, chairman of Adamsco Public Consumer Protection Institution (LPKSM), told Kompas.com that, “the 10 percent tax could be small in amount but that’s not the point. The important thing is, consumers have the right to complain if they are still charged with the tax that no longer exists.”
Well, yes, but it turns out that while the central government’s value-added tax has in fact been abolished, it was replaced by another value-added tax that benefits regional governments instead of the central government, according to the Finance Ministry.
Harry Soeratin, a spokesman for the ministry, said the 10 percent value-added tax on food and beverages had been abolished by the government starting from April 1 but had been replaced by regional taxes of the same amount.
“The 10 percent additional fee charged to customers now is a regional tax, which is then allocated to regional governments, whereas previously, the money went into the state’s account,” Harry said.
There was no need for an implementation regulation to accompany the law as it had already been implemented, he said.