Raising entertainment tax<\/p>\n
Taxation has become one of the hottest issues in this country
\nin recent months. While the directorate general of tax has yet to
\nslow down its aggressive campaign to collect taxes from
\nindividuals, Jakarta deputy governor Fauzi Bowo said on Tuesday
\nthat the city administration expected a 25 percent increase in
\nentertainment tax receipts to Rp 150 billion (US$15 million) next
\nyear from a targeted Rp 120 billion this year.<\/p>\n
Fauzi's threat that entertainment center owners faced punitive
\nactions for evading their tax obligations obviously reflects the
\nadministration's determination to collect more taxes from that
\nsector.<\/p>\n
Motor vehicle taxes are currently the largest source of
\nrevenue for the city administration. But the city's streets are
\nalready overcrowded and vehicle tax revenues will soon peak, thus
\nthe administration now has to look to other sectors to fill its
\ncoffers.<\/p>\n
Jakarta expects to collect Rp 2.35 trillion from vehicle
\nregistration fees in 2006, 21.38 percent more than the 2005
\ntarget. Car ownership tax receipts are also expected to increase
\nto Rp 2.70 trillion from Rp 2.48 trillion, fuel tax revenues from
\nRp 305 billion to Rp 575 billion, hotel tax revenues from Rp 400
\nbillion to Rp 500 billion and restaurant tax revenues from Rp 330
\nbillion to Rp 400 billion.<\/p>\n
The plan to collect even more revenue from the entertainment
\nsector shows that the city administration wants to gradually
\ndecrease its heavy dependence on revenues from motor vehicle
\ntaxes through a more aggressive collection of taxes in the
\nentertainment industry.<\/p>\n
However, it is surprising to learn that the administration
\nitself seems to suspect that many entertainment centers have been
\n"dishonest" in reporting their revenues in order to evade taxes.<\/p>\n
The administration's plan, however, immediately evoked a
\nnegative reaction from entertainment center owners. Chairman of
\nAssociation of Indonesian Entertainment Center Owners Adrian
\nMaelite said that paying more tax would deal a severe blow to the
\nentertainment industry, which he described as already on the
\nbrink of bankruptcy.<\/p>\n
Adrian argued that many entertainment centers have been
\nsuffering financial losses due to massive antidrug campaigns by
\npolice that have had the effect of discouraging people from
\nfrequenting these centers. Records made by the association
\nindicated that as many as 120,000 employees, or 30 percent of the
\n400,000 people working in the entertainment industry in the
\ncapital, had been laid-off temporarily following a series of drug
\nraids.<\/p>\n
It is a fact that drug trafficking does in fact take place in
\nnightspots, and therefore police raids are justified to some
\ndegree. However, most of the raids have violated the principle of
\nthe presumption of innocence. With TV television camera crews in
\ntow, scenes from the police raids on entertainment centers are
\nbroadcast, ignoring the fact that the majority of patrons are not
\ndrug dealers or users. Such sloppy raids have had a discouraging
\nimpact on nightspot patronage.<\/p>\n
Both the city administration and the owners of the
\nentertainment centers have their own reasons to stick to their
\narguments. But one thing worthy of note is the fact that Jakarta,
\nas a megalopolitan city, deserves bigger and better entertainment
\ncenters, and a lively, decent nightlife.<\/p>\n
It is also well known that the administration has not done
\nenough to protect entertainment centers, including nightspots,
\nfrom illegal actions by groups claiming to represent religion.
\nThere are times during the Islamic fasting month of Ramadhan when
\nmobs attack nightspots for various reasons, without any concrete
\neffort from law enforcers to stop them. Legal proceedings against
\nthe perpetrators never seem to occur.<\/p>\n
Meanwhile, during the "normal months", entertainment center
\nowners are busy dealing with certain police or military officers
\nwho come after midnight asking for uang keamanan (money for
\nsecurity services). Consequently, for all these reasons, the
\nentertainment sector has become a high-cost industry.<\/p>\n
It is high time for the administration to change its mind-set.
\nIf the entertainment centers are expected to become a significant
\nsource of revenue, then they must be given adequate protection
\nfrom harassment.<\/p>\n
Jakarta, one of the world's largest cities, needs a vibrant
\nentertainment sector, and the people of Jakarta deserve this.
\nHowever, the industry needs a healthy climate in order to grow,
\nwhich in turn will bring in more revenue for the administration
\nand at the same time provide many Jakartans with jobs.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/raising-entertainment-tax-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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