City threatens to seize Sahid Jaya, Mahakam

Bambang Nurbianto, The Jakarta Post, Jakarta

The city administration threatened on Wednesday to confiscate Hotel Sahid, Central Jakarta, and Hotel Gran Mahakam, South Jakarta, for failure to pay their tax arrears.

The two are among many hotels and restaurants in the city that have not paid their taxes since 1987, head of the City Revenue Agency Deden Supriadi told the media after attending a City Council plenary session on Wednesday.

The cumulative tax arrears of all offending hotels and restaurants for the period 1987 to 2002 amounted to Rp 50 billion, he said.

He refused to reveal the identity of the other tax evaders, but promised to issue the list as soon as possible.

He said the administration would take strict measures against tax evaders, including the possibility of confiscation. Deden, however, refused to set a deadline by which the tax arrears should be paid.

"We have sent written warnings several times, but many have ignored them," Deden said.

This is not the first time that the city administration has threatened to seize the assets of tax evaders. Similar threats were made in recent years, but in the end were not carried out.

On Wednesday, Sutiyoso submitted to the City Council three drafts of bylaws, including one on entertainment, hotel and restaurant taxes.

The city administration plans to collect Rp 627 billion in hotel and restaurant tax this year. Last year it collected Rp 520 billion, while the target was Rp 490 million.

Article 15, paragraph 2 of bylaw no. 9/1998 on hotel and restaurant taxes says the taxpayers concerned should pay 2 percent monthly interest on the total tax arrears that have not been paid by hotel and restaurant managements.

Paragraph 3 of the article adds that the city administration shall impose a sanction of up to 100 percent of the total tax arrears if taxpayers fail to fulfill their obligations within five years.

Article 39 stipulates that tax evaders could be penalized with a jail sentence of up to two years or pay a fine four times the total of their arrears if they deliberately refuse to return the tax form.