Tax-evading premises face closure: Wahab

JAKARTA (JP): The City Revenue Agency has threatened to close down hotels, restaurants and nightspots which have failed to pay taxes, an official said yesterday.

The agency's head, Wahab Rachmatsjah, said the threat was aimed at forcing owners of the establishments to pay their taxes.

The head of City Council Commission C for financial affairs, Amarullah Asbah, said earlier that the total amount of taxes due from 136 hotels and restaurants and 96 nightspots between 1993 and 1997 exceeded Rp 23.2 billion (US$6.02 million at current exchange rate).

The figures were obtained by Amarullah from a special team in charge of improving city revenue collection.

Wahab, however, refuted the figures, saying there were unpaid taxes but the amount was not that high.

"Moreover, some of the taxpayers have already paid their taxes and others have gone bankrupt," he said.

He said the number of tax evaders in last four years was 422 nightspots, restaurants and hotels, with total tax dues amounting to about Rp 10 billion, of which Rp 4 billion was owed by nightspots and about Rp 6 billion by restaurants and hotels.

Wahab explained that before closing down the hotels, restaurants and nightspots, the agency would first send their owners warning notifications. If they then failed to pay within 14 days, the agency would give them a final notice.

He said that after being closed down, the establishments' properties would be confiscated and auctioned by the state-owned Auction Office.

Wahab said this procedure was based on the 1997 Law on Tax Collection and other city regulations.

Commenting on the agency's plan to take stern action against taxpayers who failed to meet their obligations, Amarullah told The Jakarta Post yesterday that he fully agreed with the procedure.

"It's time for the city to take a stern move in tax collection. I don't believe that any of the businesses do not gain profits. Every weekend, those places are crowded with customers.

"However, the city administration must be careful in listing the companies whose owners have not paid taxes. If the agency's accusation (of not paying taxes) is not true, it'll damage both the city's and company's reputation.

"So, don't be sloppy. The officials must stick to the rules. Don't be easily tempted by owners' lucrative offers to avoid tax payments," he said. (07/05)