Better security asked in return for new tax

Better security asked in return for new tax

Damar Harsanto, The Jakarta Post, Jakarta

Entertainment center owners are demanding better security in
exchange for paying the new taxes to be imposed on them by the
city administration.

Association of Indonesian Entertainment Center Owners
(Aspehindo) chairman Adrian Maelite said on Sunday that the
entertainment business would be willing to pay the new taxes as
long as the Jakarta administration provided better protection and
security.

The City Council endorsed a new bylaw on local taxes on April
21, which allows the city administration to charge taxes on 71
new targets, including entertainment businesses, hotels and golf
courses.

"We would urging a quid pro quo from the administration in
return for the higher taxes they are slapping on us," Adrian told
The Jakarta Post on Sunday.

Under the new bylaw, anyone wanting to establish a new club
has to pay a tax of Rp 5 million (US$550), while the tax on the
establishment of a discotheque is Rp 5 million, a live music
venue Rp 2 million and a karaoke center between Rp 3 million and
Rp 5 million. On top of that, they still have to pay annual taxes
of between Rp 1 million and Rp 3 million.

Adrian complained that the entertainment industry was often
subjected to security disturbances.

He did not give details of the disturbances, but in the past
five years the sector has been repeatedly targeted by groups such
as the Islam Defenders Front (FPI), which has become famous for
violently attacking entertainment centers that remain open during
the Islamic fasting month of Ramadhan.

Last year, the FPI attacked and vandalized restaurants and
entertainment centers across Greater Jakarta during Ramadhan.

This string of attacks was not the first. The group's leader,
Habib Rizieq Shihab, was sentenced to a seven-month prison term in
2003 for ordering the members of his group to raid and attack
bars, restaurants and pool halls over a protracted period of
time. He was released in November 2003.

So far, little has been done by the police and the city
administration to prevent such violence, despite the fact that
the FPI often publicly expresses its intention of attacking
restaurants and night spots that ignore their warnings.

Meanwhile, a spokeswoman for a five-star hotel here, who
requested anonymity, complained that the new taxes would only
place another burden on the already ailing industry.

"A new ruling always means more money," she said.

She said that most hoteliers were still trying to come to
grips with the fuel price increases announced by the government
early last month.

Worse still, competition among hoteliers had become tighter,
forcing them to slash profit margins by offering unsustainable
discounts, she complained.

"This simply shows that the business is no longer healthy,"
she asserted.

At the moment, an entrepreneur has to pay a tax of Rp 20
million to establish a hotel and Rp 15 million for a motel.

Entertainment centers, hotels and restaurants are among the
targets of the newly endorsed bylaw on local taxes.

Amending Bylaw No. 3/1999 on local taxes, the new bylaw allows
the administration to impose one-off start-up taxes and annual
taxes on entertainment centers, hotels, restaurants and golf
courses.

The administration has set a tax-collection target for 2005 of
Rp 355.8 billion (US$37.4 million) from hotels, Rp 296.7 billion
from restaurants and Rp 126 billion from entertainment centers.