Nightclub closures could cost city Rp 258b in taxes

JAKARTA (JP): The city administration would lose about Rp 258.01 billion (US$112.17 million) a year if it closed all the city's entertainment venues, a councilor says.

The chairman of the city council's commission C for finance, Helmy AR Syihab, said yesterday that city revenue would decrease because entertainment venues were one of its greatest sources of income.

The councilor was commenting on a statement made by the head of the city tourism agency, Fauzi Bowo, who said that the city could survive without nightspots.

Fauzi told discotheque owners on Tuesday night that the city administration would take strong action against those breaking the law, especially the law regarding drug trafficking.

"The revenue will decrease because there are several taxes and levies imposed on entertainment business, such as development tax, entertainment tax and tourist fees," Helmy said.

Helmy said that in the 1995/1996 fiscal year the city received Rp 258,01 billion from entertainment spots: Rp 61 billion from entertainment taxes, Rp 196 billion from development taxes, Rp 22.14 million from alcohol taxes and Rp 823.85 million from tourist fees.

"In the 1995/1996 period, regional revenue contributed Rp 1.67 trillion towards city revenue, and it will decrease if the city administration eliminates all the entertainment spots. I think such action will only harm city revenue," he said.

Helmy said that closures would hurt the people employed by nightspots.

"Don't forget the sector employs thousands of workers who would be unemployed if the spots were closed down," he added.

Jakarta needs nightspots to meet the public's demand for entertainment, especially since the authorities have been trying to turn Jakarta into a service city, Helmy said.

He said the city's decision to allow many nightspots was correct, and that eliminating the nightspots would solve nothing.

"I oppose drug trafficking, but the city administration should find better ways to fight it other than closing down the nightspots," he said.

The city administration, City Police and the Jakarta Military Command have been conducting operations to nab drug traffickers at nightspots.

The city administration has urged disco owners to help fight the Ecstasy trade. (yns)