Authorities call for street cafe tax

JAKARTA (JP): Jakarta Governor Sutiyoso requested on Wednesday that owners of street cafes, which have the local name kafe tenda, pay tax to the administration.

"I've observed that many of the cafes have a lot of customers," Sutiyoso said, after bestowing certificates to the city's 92 best tax payers from hotels, restaurants and entertainment centers.

The governor said his administration would no longer tolerate the disregard by kafe tenda owners to contribute funds for the city budget as required by the existing law.

He said an exception to the rule would be made only if cafe owners lacked substantial a substantial client base.

Sutiyoso said he had ordered officers responsible for such matters to identify all the cafes in the city.

He said that in the past the city had not pressed the obligation on the cafe owners in order to foster the growth of business activities during the recent economic crisis.

"But now, many of the street cafes are run by rich people and have a lot of customers."

He said the move to request street cafe operators to pay tax was aimed at increasing city revenue devised from taxes.

City revenue from tax and levies in the 1999/2000 fiscal year was projected to reach Rp 3.69 trillion, Sutiyoso said.

"With signs of an economic recovery, I hope tax payers can pay their tax obligations."

The capital has witnessed a mushrooming of kafe tenda since the beginning of the economic crisis in mid 1997. Cafe owners were not obliged to pay the 10 percent tax, similar to that imposed on restaurants, because most of them employed retrenched workers.

Street cafes were subsequently established by wealthy individuals, including film stars and other prominent figures, at strategic locations, such as at the National Monument (Monas) Park in Central Jakarta and the Central Business District, off Jl. Sudirman.

According to City Bylaw No. 9/1998 on hotel and restaurant taxes, street cafe owners are also obliged to pay 10 percent of their earnings to the administration.

Last year, the city administration collected Rp 276 billion in hotel and restaurant taxes. The administration has projected adding this year Rp 266 billion in hotel and restaurant taxes to its coffers.

Sutiyoso said the city's economic growth this year was estimated to be recorded at minus 5.42 percent, an improvement from last year's negative growth of minus 17.62 percent.

The governor also vowed to punish "errant" tax payers in the capital who failed to meet their obligation.

"I believe many of them are yet to pay their taxes," he said without elaborating. (jun)