Authorities call for street cafe tax

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)