City to tax lottery organizers

The Jakarta Post, Jakarta

The City Council plans to propose a bylaw on taxes to be paid by organizers of free lotteries in the mass media.

Councillor Binsar Tambunan of the Indonesian Democratic Party of Struggle said the bylaw was expected to increase the city's revenue by between Rp 3 billion and Rp 4 billion a year.

"I estimate the city could earn more than that. I hope the bylaw will be approved next year," Binsar, who heads a team preparing the bylaw, told reporters.

He said the tax on the lottery prizes in the mass media was currently paid by the winners of the lottery to the Ministry of Social Affairs.

He said companies that currently conducted free lotteries through private television stations, should pay tax to the city administration.

"Next year, the companies will have to pay the tax before they obtain a permit from the administration to hold the lottery," Binsar said.

He said the bylaw was prepared by the council in cooperation with the Institute of Structural Development of the University of Indonesia.

Without mentioning the amount, Binsar said companies that regularly held free lotteries, would pay higher tax.

"The amount of the tax also depends on the prizes as well as when they hold the lottery," he added.

Some banks currently sponsor quizzes with prizes worth billions of rupiah, including state-owned Bank Mandiri which sponsors Who Wants to be a Millionaire? on RCTI television station.

Privately-run Bank BCA also sponsors weekly quiz Gebyar BCA on Indosiar television station.

Inspired by the spirit of regional autonomy, the city is intensively pursuing efforts to increase its revenue.

Last week, the administration announced it planned to tax street vendors here. But Governor Sutiyoso said later that thorough discussions were needed before the plan could be carried out.