Tangerang mayoralty recieves less in tax revenue

TANGERANG (JP): The mayoralty's annual income from hotel and restaurant tax dropped by half from Rp 20.78 billion (US$2.73 million) in 1997 to Rp 10.4 billion this year, an official said on Monday.

The head of Tangerang revenue office, Agus Burhanudin, said the drastic plunge in revenue was mainly due to the prolonged economic crisis and the extensive damage to hotels and restaurants during the mid-May riot in the area.

Implementation of Law No. 18/1997 also played a large role in trimming tax revenue from hotels and restaurants in the area, Agus said. The law states that if a company pays value-added tax it does not have to pay the local government hotel and restaurant tax.

One of the major contributors, PT Aerowisata Catering Service at Soekarno-Hatta International Airport, stopped its annual payment of Rp 4 billion to the mayoralty in line with the implementation of the law, he said.

"After the law was put into effect, Aerowisata Catering Service no longer had to pay hotel and restaurant tax," Agus explained.

The mid-May riots that spread to Tangerang, located west of Jakarta, caused the mayoralty Rp 3 billion in lost tax revenue as many businesses could no longer operate due to severe damage, the official said.

At least 300 shops, restaurants, hotels and shopping centers were damaged by mobs during the three-day riots, Agus said.

For the remaining three months of the ongoing fiscal year, his office has predicted it would collect Rp 7 billion, or 43 percent less than the previous corresponding period during which the city managed to acquire Rp 13.78 billion from 134 taxpayers.

According to Agus, who was accompanied by the head of the Tangerang revenue office, Rochimin Sasmita, his office will cooperate with the local tourist office to increase the mayoralty's revenue by collecting taxes from enterprises who should obtain permits from the tourist office.

Rochimin said some department stores in his area, such as in Pamulang, Ciputat and Curug districts that were extensively damaged during the May riots have gradually resumed business.

His regency expects to collect some Rp 4 billion from hotels and restaurants during the 1997/1998 fiscal year, compared to Rp 7 billion obtained the previous fiscal year.

"The last count in mid-December shows that our revenue will reach Rp 3 billion. We estimate that by the end of the fiscal year in April 1999, we could accumulate up to Rp 4 billion," Rochimin said. (41/ivy)