Value added tax feared to cause traders' unrest

Value added tax feared to cause traders' unrest

JAKARTA (JP): The imposition of value added tax on traders at PD Pasar Jaya markets will cause unrest, a councilor said yesterday.

The deputy chairman of the city council, Ismunandar said that the traders will not be happy about it adding that there are no regulations requiring them to pay the tax.

"I believe that the traders will be unhappy with the idea of imposing value added tax, which is not required under the terms of Provincial decree No. 6/1992," Ismunandar, the deputy chairman of the city council said.

Therefore, the directorate general of tax should exempt PD Pasar Jaya from the tax, he said.

"We will have to collect the tax from the traders if the government turns down our request to be exempted from the tax," PD Pasar Jaya spokesman Lihardin Sipayung said.

PD Pasar Jaya imposes 16 type of fees on traders, but not the tax, based on provincial regulation No. 6/1992, allowing the company to collect fees for market development, business centers, parking lot service, building maintenance and 12 other sevices.

He said he could not say wether the traders will also be asked to pay last years' tax towards settling the Rp 26.06 billion debt owed for V.A.T. since 1989.

Lihardin also suggested that the city administration should review the provincial decree and include value added tax imposition on traders.

The Directorate General of Tax threatens to confiscate PD Pasar Jaya assets to pay the debt.

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 city claims exemption from the obligation because, according to government regulation No. 28/1988, the money collected by PD Pasar Jaya, being part of the city's revenues, shall be exempted from the 10-percent value added tax. (yns)