City to seal off more nightspots for tax abuse

JAKARTA (JP): Two more entertainment spots would be sealed off probably on Thursday by city authorities for failing to pay the total Rp 170 million (US$20,000) tax to the government, an official said on Wednesday.

"We'll seal off Duta Dua and Timung Satu massage parlors, both located in South Jakarta, on Thursday," head of the city revenue agency, Deden Supriadi told a press conference.

Earlier on Tuesday, his office -- under the escort of reporters -- closed down two clubs, namely Monggo Mas karaoke bar on Jl. Hayam Wuruk in West Jakarta and Kafe Marina in Ancol, North Jakarta, for failing to pay the 30 percent entertainment tax.

According to Deden, his agency has listed a total of 11 entertainment places, including the four mentioned above, as having failed to pay a total of Rp 6.03 billion in tax for the past three years.

The nine other businesses, he said, won't be sealed off in the near future "they have started paying some of the tax plus its 10-percent fine."

"We're still giving them a chance to settle their debts," Deden said.

He identified the nine places as the Sahid Jaya Hotel, Tunglok Suki restaurant and Cipta Hotel in Central Jakarta; Ayam Goreng Priangan restaurant, and Bubble Tea Restaurant in West Jakarta; Istana Kuring restaurant in South Jakarta; New Cleopatra and Manhattan discotheque in North Jakarta; and Sederhana restaurant and its branches across the capital.

"The agency applies a self assessment procedure in collecting the tax, which is usually due every mid-month. We also send warning letters to the businesses failing to settle their dues," Deden said.

He explained the tax collection always considers the taxpayers' performance and willingness, and tried not to jeopardize their businesses.

Interviewed separately, secretary general of the Indonesian Association of Entertainment Centers (Aspehindo), Adrian Maelite, said the association could understand the agency's decision to seal off the four places.

"The businesses were reported to have held their tax payment for over a year. It exceeds tolerance," he said on the phone.

Aspehindo, however, demanded the city administration postpone the enactment of the 30 percent entertainment tax, which has been effective since November last year.

The implementation of the tax would force business operators to hike their service charge as it was actually collected from visitors, not from the businesses.

"We only collect the tax from our guests and then pay it to the city revenue agency," he said.

"If the tax is too high, our guests will run away from our businesses," Adrian added.

The association also proposed a stratification of the tax instead of the flat rate tax of 30 percent.

"We propose that the high-class entertainment centers pay higher tax than those of the lower class," he said.

According to Deden, the number of taxpayers in the entertainment centers in Jakarta has dropped to 777 places in 1999 from 938 places in 1998.

About 183 of these taxpayers operate coin machine games, and 163 places provide massage services and the other 122 places are billiard centers, he added. (07/nvn)