City to set deadline for tax evaders

Bambang Nurbianto and Zakki Hakim, The Jakarta Post, Jakarta

The city administration announced on Friday that at least 774 tax evaders would be issued letters on July 1 giving them 14 days to pay their tax arrears; otherwise their assets would be seized.

The tax evaders comprise hotels, restaurants, entertainment centers and outdoor advertisement companies, whose tax arrears amounted to around Rp 58.5 billion in total.

"If the companies still ignore the letters, we will confiscate their assets as stipulated in existing regulations," head of the City Revenue Agency Deden Supriadi told a news conference.

Deden, citing Law No. 19/1997, said recalcitrant companies would have a two-day grace period after the deadline to meet their obligations, before authorities moved to seize their assets for an auction.

The threat came after City Hall spokesman Ahyat M. Awe accused Deden and his subordinates of colluding with the tax evaders, assisting them in evading their tax payments.

Deden denied the allegations, but failed to give any reasons as to why his office had not taken firm action against these companies, which had not paid their taxes from 1987 until March this year (not 2002, as reported earlier).

The tax evaders included Sahid Jaya Hotel and Gran Mahakam Hotel, he said on Wednesday.

But on Friday, Deden corrected his own statement, saying the Gran Mahakam had already paid its tax arrears, worth Rp 679.4 million, on May 29.

"I just received the report yesterday (on Thursday)," he added.

In a statement to The Jakarta Post, the Gran Mahakam management confirmed on Friday that it had fulfilled its tax obligations.

The Sahid Jaya topped the list of 49 hotels in Jakarta that have failed to pay their tax arrears. It owes Rp 13.27 billion (not Rp 18.88 billion, as reported previously) to the state.

Sahid Jaya's public relations manager Sri Ayuningsih did not confirm nor deny the reports of her hotel's tax arrears.

She said the hotel management would hold a press conference soon to clarify the reports.

Among the top evaders were: Park Plaza Hotel, with Rp 2.57 billion in arrears; Orchid Hotel with Rp 2.37 billion; Omni Batavia Hotel with Rp 1.62 billion; Pulau Seribu Marine Resort with Rp 1.39 billion; and Sano Hotel with Rp 1.02 billion.

Other hotels that have not fulfilled their tax arrears include Pulau Anyer Rest, Bukit Indah Hotel, Ambhara Hotel, Pantara Wisata Jaya, Kebayoran Inn Hotel, Pulau Sepa Permai, Citra Hotel, Istana Bungur Hotel and Salemba Indah Hotel. They owe Rp 26.1 billion in total.

There were also 407 restaurants whose total tax arrears amounted to Rp 20.3 billion.

At least two American fast-food firms were included among the recalcitrant restaurants. They were Dunkin' Donuts, whose tax arrears amounted to Rp 4.37 billion, and Thank God It's Friday, or TGIF.

Other tax evaders were Gandy's Steak, which owed Rp 1.02 billion, Jolly Bee Restaurant with Rp 780 million, American Chilli's with Rp 465 million, and Cowon Restaurant with Rp 336 million in arrears.

Alexander Layong, Dunkin' Donuts' general manager for operations, admitted that his company had been embroiled in some 200 tax cases that occurred between 1995 and 1998, due to overlapping tax policies.

The company had settled 11 cases worth about Rp 200 million through the Tax Dispute Settlement Agency (BPSP) and assumed that the remaining cases had automatically been settled too, he said without elaborating.

Deden said his office had also reported at least 356 entertainment centers in Jakarta that had failed to pay their taxes, valued at around Rp 10.9 billion in total.

They included the Lucky Plaza Karaoke and Bar, which owes Rp 1.8 billion.

In addition, at least 62 other companies had yet to pay taxes incurred by their outdoor advertisements, which amounted to Rp 1.2 billion in total, Deden said.