City officials accused of colluding with tax evaders

Bambang Nurbianto, The Jakarta Post, Jakarta

The Jakarta administration accused on Thursday officials at the City Revenue Agency of colluding with the managements of the Sahid Jaya Hotel and the Gran Mahakam Hotel, both of which have failed to pay their tax arrears.

"The hotels have not paid their taxes for about three years, but why has the agency not taken any action against them ... there must be collusion," City Hall spokesman Ahyat M. Awe said.

However, Ahyat fell short of saying the accused officials would be dismissed or detained for questioning over their alleged involvement in the collusion.

Later on Thursday, Governor Sutiyoso summoned the head of the City Revenue Agency, Deden Supriadi, in connection with the tax arrears of the Sahid Jaya and the Gran Mahakam, as well as other hotels and restaurants.

Sutiyoso said he would not rush to judgment on the alleged involvement of Deden and his subordinates in colluding with the hotels.

"I don't know (if there was collusion). What I know from the media is that they (the hotels) only made promises (to pay their taxes) but did not meet these promises," he said.

The governor said he had not received an official report from the City Revenue Agency on tax arrears, which amount to Rp 50 billion in total.

Ahyat said this amount included more than Rp 18 billion owed by the Sahid Jaya. He declined to reveal the amount owed by the Gran Mahakam and other hotels.

Speaking after Thursday's meeting with Sutiyoso, Deden denied any collusion by his office, and promised to provide details of the tax arrears at a press conference on Friday.

He said his agency had issued three warning letters to the Sahid Jaya and the Gran Mahakam, but the letters were ignored. He added that another letter would be sent later this month.

If no action is taken by the hotels within 21 days after the letters are issued, they will be given another 14 days to respond before the city administration moves to seize their assets, he said.

The city administration has set a tax revenue target of Rp 627 billion from hotels and restaurants across Jakarta this year. The city collected Rp 520 billion in taxes from the same sector in 2002.