Pasar Jaya owes Rp 26.06b in value added tax

Pasar Jaya owes Rp 26.06b in value added tax

JAKARTA (JP): The city-owned market company PD Pasar Jaya owes
Rp 26.06 billion (US$11.58 million) in value added tax, which it
has failed to pay to the government since 1989.

The city council's commission for financial affairs revealed
yesterday that in 1989 PD Pasar Jaya failed to pay Rp 710.76
million in value added tax, Rp 1.5 billion in 1990, Rp 2 billion
in 1991, Rp 3.8 billion in 1992, Rp 4.33 billion in 1993, Rp 4.31
billion in 1994 and Rp 1.24 billion from January to March this
year.

The amount has since swollen to Rp 26.06 billion, including
late-payment fines.

The chairman of the commission, Helmy AR Syhab, said the case
was disclosed in a meeting last month.

Helmy said that despite the company's for tax exemption, the
directorate general of tax is threatening to confiscate the
company's assets.

PD Pasar Jaya imposes 16 type of fees on traders. It does not,
however, impose any taxes on traders. According to the
governmental regulation No. 28/1988, the money collected by PD
Pasar jaya shall be exempted from value added taxes.

The Directorate General of Tax charges a 10-percent value
added tax on the fees collected by the market company.

The imposition of fees on traders is based on a provincial
regulation, No. 6/1992, which allows the company to collect fees
for market development, business centers, parking lot service,
building maintenance and 12 other areas.

Because the fees are considered city revenue, the company
claims they must be exempted from the value added tax, which took
effect in 1989.

The commission supports the PD Pasar Jaya argument, saying
that the city revenues are the main financial source of the city
budget. "Charging the value added tax on city revenue is
completely against the implementation of autonomy policy," Helmy
said, adding that PD Pasar Jaya does not have enough money to pay
the tax.

Transfer

He said that the company collected Rp 1 billion in 1994/95
from the traders. The money was transferred to the city revenue
office. In the 1995/96 fiscal year PD Pasar Jaya expects to
collect Rp 1.1 billion from the traders.

Helmy said that the main task of PD Pasar Jaya is providing
business places for small traders, not seeking financial profit
from them.

"Charging the value added tax will only burden small traders,
he said.

"They have already complained about the current fees and I am
sure that any additional financial burden will upset them," Helmy
said.

PD Pasar Jaya was established by provincial decree No. 7/1982.
It has 163 market places, 122 of which are small markets,
scattered throughout the city with total assets of Rp 163
billion. (yns)