City to set deadline for tax evaders

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.