Five hotels reported to tax arrears

Five hotels reported to tax arrears

Bambang Nurbianto, The Jakarta Post, Jakarta

Stepping up its move against tax evaders, the Jakarta
administration has reported five hotels to the Jakarta
Prosecutor's Office for failing to clear their tax arrears.

However, the administration has yet to decide if it will seize
the hotels or ask the hotel management to be "held hostage" for
evading tax.

Head of the City Revenue Agency Deden Supriadi said on Monday
that the five hotel managements had been reported to the
prosecutors office in mid-July after his agency did not see any
goodwill from them.

"Only tax evaders that refused to cooperate would be reported
to the prosecutors office," Deden told the media before attending
a plenary session at the City Council on the revision of the city
budget.

He named only three of the five hotels -- Sahid Jaya, Omni
Batavia and Park Plaza.

The agency announced earlier that Sahid Jaya's tax arrears
totaled Rp 13.27 billion (US$1.56 million), Park Plaza's Rp 2.37
billion and Omni Batavia's Rp 1.62 billion.

None of the three hotel managements were available for
comment.

The hotels were among dozens of tax evaders, including
hotels, restaurants, entertainment centers and outdoor
advertisement firms, whose total tax arrears amounted to around
Rp 58.5 billion.

The agency has issued 70 distress orders to the tax evaders
but has so far collected only Rp 3.5 billion from the companies.

Deden said that apart from reporting the tax evaders to the
prosecutors office, he would also continue his previous move of
issuing distress orders against the tax evaders who refused to
cooperate with his agency.

Asked why he had not issued seizure orders against the tax
evaders, he argued that the 70 tax evaders that had been given
distress warrants had begun paying their arrears in installments.

Based on Law No. 19/2000 on the enforced collection of taxes,
the agency is authorized to compel tax evaders to pay their
arrears or face seizure of their assets.

Many criticized that tax evasion often occurred because of
collusion between taxpayers and officials at the agency.

Last year, the administration asked the Central Jakarta
District Court to seize Hotel Mulia Senayan, Central Jakarta, but
the court annulled the seizure as the hotel started to repay its
debt to the administration, which amounted to Rp 15 billion.

The central government announced earlier that it planned to
place tax evaders in detention.

Government regulation No. 137/2000, which came into effect
early in 2001, gives the tax office authority to detain tax
evaders.

Three blocks, consisting of three to five cells at Cipinang
prison, East Jakarta, have been made ready to hold tax evaders
until they agree to pay their obligations to the state.

Similar preparations have also been made at Salemba
penitentiary, Central Jakarta, for tax evaders in the city.