City Revenue Agency to be questioned over tax hike

JAKARTA (JP): City Council Commission C for city revenue will summon the head of the City Revenue Agency over his failure to delay the enactment of a 1998 bylaw which requires operators of nightspots to pay a 30 percent tax, a councillor said on Wednesday.

Commission C chairman Amarullah Asbah said during a meeting with representatives of the Indonesian Association of Nightspots (Aspehindo) that the commission would soon discuss the 1998 bylaw's enactment in a tripartite meeting with agency chairman Deden Supriadi.

"The agency has to clarify its decision to ignore an agreement between the agency, deputy governor on economics and finance Fauzie Alvi Yasin, Aspehindo chairman and the commission last April, which endorsed the postponement of the bylaw's enactment," Amarullah of the Golkar Party faction told the representatives, who came to the commission to air their protest over the current tax, which is 20 percent higher than the previous one.

City Bylaw No. 7/1998 regulates the tax increase from 10 percent to 30 percent on coin-operated game machines, discotheques, massage parlors, pubs and singing halls. Meanwhile, other nightspots are required to pay a 10 percent tax.

The new tax took effect last November.

Suharto Ardan, the Aspehindo chairman, said nightspot operators previously stated they could not afford to pay the tax hike.

"We only charge our customers 10 percent tax, but the agency has forced us to pay 30 percent since November. It's just impossible," he said.

"The tax increase has added to the financial burden of owners, many of whom are now in the early stages of bankruptcy due to the prolonged economic crisis," he added.

The entertainment industry has been severely affected, he said. He cited that some 15,000 workers of various nightspots in the city planned to take to the streets, demanding the revocation of the 1998 bylaw.

"We have forbidden them from doing so. But if the agency refuses to postpone the enactment of the bylaw, we (the nightspot operators) will join them in their protests," he said.

Ardan alleged that several agency officials told operators of nightspots to pay the old 10 percent rate, but to put the new tax rate on the payment receipts.

"It is unrespectable. They (agency officials) are trying to trick us, hoping that in the next few months, they can force us to pay the new tax rate as stipulated in the bylaw," he said.

"We have been forced to pay higher taxes, but we have received little protection from the administration," he said, referring to the sporadic raids conducted by members of the Islam Defenders Front (FPI), who sought to curb vice in the capital. (06)