Over 60 hotels in W. Java bankrupt

BANDUNG: More than 60 star-rated hotels and motels across West Java have gone bankrupt in the past two years due to excessive tax burdens, a hotel and restaurant association official said.

Chairman of the West Java chapter of the Association of Indonesian Hotels and Restaurants (PHRI) Hermawan said, over the weekend, that many hotel and restaurant owners had long complained about the burdensome taxes and levies collected by municipal and regency administrations.

He said 72 bylaws requested that businesspeople pay taxes and levies to boost regional revenues, courtesy of the regional autonomy regulations that came into effect on Jan. 1, 2000.

Hermawan said many of the bylaws were unlawful, including one on tax imposed on entrepreneurs applying for licenses to build hotels.

"It has been understood that the tax is levied under the authority of the directorate general of tourism and is renewed every five years. But the local governments demand the tax on an annual basis," he said, adding the amount of tax varied between Rp 1 million and Rp 2 million.

The local administration had also bypassed the national regulations on hotel qualification, training fees, worker health insurance, he added.

"The West Java administration wants the 700 PHRI members to become their cash cow," Hermawan said. -- JP