Over 60 hotels in W. Java bankrupt

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