Nightspot owners appeal for delay on tax hike

JAKARTA (JP): The Indonesian Association of Entertainment Centers (Aspehindo) asked City Council on Tuesday to issue a ruling that would postpone the enactment of a 1998 city bylaw which imposes a 20 percent increase on entertainment tax.

"Currently, we are having a bad season as an entertainment center's daily income is only Rp 1 million to Rp 2 million (US$136 to $273). It would be very hard for us if the tax is increased," association chairman Affendie Sastra told city councilors.

City Bylaw No. 7/1998 is imposing a tax hike from 10 percent to 30 percent on coin-operated game machines, discotheques, massage parlors, pubs and singing halls. Meanwhile, other kinds of entertainment centers are still paying the 10 percent tax.

The tax itself, however, has not been in effect until last November.

Most operators of entertainment centers said the city administration failed to widely publicize the enactment of the 1998 bylaw.

"We will be able to pay up to 70 percent from the total amount we are supposed to pay to the city revenue collecting agency if the tax is set back to 10 percent," Affendie said.

He said there were up to 20 cars from various city authorities, including the police and the military, lining up night and day at the entertainment centers "to pick up their share".

He declined, however, to reveal the amount of money given to the officials or city agencies.

"Therefore, the council should postpone the enactment of the bylaw," he said.

Chairman of City Council's Commission C for financial affairs, Amarullah Asbah, said it would be impossible to postpone the enactment of the bylaw.

"The bylaw was issued in conjunction with Law No. 18/1999 on Regional Taxes and Retributions, which stipulates that each province can set an entertainment tax of up to 35 percent," he said.

"If you want to postpone the bylaw, you have to amend the 1997 law first. But that's not our jurisdiction," he added.

Councilor Ahmad Heryawan of the Justice Party (PK) faction said the cost needed to rehabilitate the social impact of the entertainment centers was higher than the revenue yielded from the entertainment sector.

"The hike is a good measure to lessen social costs caused by the entertainment centers. I've been told by former councilors that the hike was intended to stop young people from entering such places," he said.

He questioned the operators who failed to pay the tax to city revenue.

"The tax is paid by the customers and not by the operators, who only act as collectors," he said. "They have no grounds to withhold the money."

While acknowledging that entertainment was part of a person's life, he called on all parties to redefine the term entertainment and to set a common definition to it.

"Is it really entertainment to go to discotheques, which are full of smoke and vices?" he asked.

"Take the massage parlor as an example. We can't remove the stigma of prostitution from it. We know that not all massage parlors conduct such practices," he said.

Ahmad also stressed the importance for all city authorities to be held responsible for its personnel's behavior in the field.

"Officials often dismiss violations of the regulations for some payment of money or even demand their own share from the business," he said, while citing Affendie's confession. (05)