Pasar Jaya asked to pay Rp 6.5b in tax arrears

Pasar Jaya asked to pay Rp 6.5b in tax arrears

JAKARTA (JP): The tax court has rejected an appeal by PD Pasar
Jaya, the Jakarta administration-owned company managing
marketplaces in the capital, to wave its value added tax arrears
of around Rp 6.5 billion (US$2.83 million).

Tax Director General Fuad Bawazier confirmed the tax court's
decision yesterday, saying that Pasar Jaya has no choice but to
pay the tax.

He, however, said that his office would still listen to the
company, especially regarding the settlement procedure of the
unpaid tax.

"I have contacted the (Jakarta) governor to coordinate the
settlement of the unpaid tax," he said in response to the
decision of the tax court.

Pasar Jaya made an appeal to the tax court recently after the
Tax Director General refused to pardon the company's unpaid value
added tax.

Earlier reports said that Pasar Jaya owed around Rp 26.06
billion to the government in value added tax arrears (including
fines) during the period between 1989 and March this year.

Fuad, however, said that the amount of Pasar Jaya's tax
arrears is around Rp 6.5 billion.

Pasar Jaya, with total assets of Rp 163 billion, operates 163
small and medium-size marketplaces in the capital.

The dispute between Pasar Jaya and the tax office has been
widely publicized. City councilors mostly criticized the tax
office's refusal to give special treatment to the company, which
operates most of its shopping facilities for financially weak
traders.

Moreover, the company has never collected value added tax from
traders who use their shopping facilities, they said in
supporting the company.

Tax officials, on the other hand, defended the decision,
saying that it was the company's own mistake in not collecting
the tax.

According to the regulation, Pasar Jaya must pass on the value
added tax collected from clients to the tax office.

A source said that Pasar Jaya's failure in winning the appeal
was partly caused by its inability to provide reliable financial
reports to the tax court.

Development and Monetary Supervisory Board gave no opinion
about the company's financial reports for 1988 and 1989 which
lacked proof of both revenues and expenses. (hen)