Fri, 18 Jul 2003

Revenue agency not to seize of tax evaders

The Jakarta Post, Jakarta

City administration decided on Thursday not to seize the assets of five tax evaders, comprising three hotels and two restaurants, claiming that the evaders have started to pay their arrears, amounting to Rp 3.27 billion (US$397,333).

The City Revenue Agency had earlier sent distress orders to the five tax evaders after their warning letters were ignored by the hotels and restaurants. It also threatened to seize the properties if the orders were not responded to.

"We do not need to issue letters of seizure as they have begun paying the arrears in installments," head of the agency Deden Supriadi said.

Deden refused to mention the amount of money which has been paid by installment.

Based on Bylaw no.4/2002 on city taxes, evaders have 16 days to pay their arrears. If not, the city revenue agency can issue a letter of seizure.

The deadline for the tax evaders was Wednesday.

The five tax evaders are: Omni Batavia hotel with tax arrears of Rp 1.6 billion, Sano Hotel with Rp 1.02 billion, American Chillis restaurant with Rp 465 million, Pondok Laut restaurant with Rp 106 million and Nusantara Hotel with Rp 67.62 million.

The management of the companies was reluctant to confirm whether or not there had been any payment of the arrears.

A staff member of Sano Hotel was contacted by The Jakarta Post but said she had no authority to comment.

The five were not the biggest evaders in the city.

The agency announced that the five biggest tax evaders are Sahid Jaya hotel with tax arrears of Rp 13.27 billion, Dunkin Donuts restaurant with Rp 4.37 billion, the Park Plaza Hotel with Rp 2.57 billion, and the Orchid Hotel with Rp 2.37 billion.

It is unclear why the agency has not sent distress orders to the biggest evaders.

Deden argued the time had not come for issuing distress orders to them.

For example, he said, the Sahid Jaya hotel will be given distress orders on July 20 if the hotel's management does not pay the arrears.

Management of Sahid Jaya hotel sought another solution from the city's administration. They said that a difference in the calculation of arrears has been reached by the agency and the hotel's management.

The agency revealed that it had issued distress orders against 24 of a total of 600 tax evaders, including hotels, restaurants, entertainment venues and advertising companies. The total tax arrears appears to be Rp 58.5 billion.

Observers are critical of the situation and hint that the taxation problems could be caused by a collusion between tax payers and officials from the agency.