Warteg Owners and Massage Therapists React to Hashim’s Proposal for 11% VAT

JAKARTA — A number of small business operators have objected to a proposal to extend tax collection to everyday transactions. They fear that an 11 per cent tax would increase the burden on businesses, particularly as operating costs continue to rise and incomes remain uncertain.

Imam Kantowi, owner of Warteg Sidomulyo on Bukit Duri Tanjakan street, said imposing tax on small businesses would burden traders who run their operations using their own capital. “It would clearly be a burden. I run the business myself and use my own capital; I have no debts to a co-operative or a bank. If tax is suddenly imposed, it will obviously be difficult,” Imam said when met at his food stall.

He said small traders already faced various expenses, from the cost of staple ingredients to other tax obligations. They fear an additional tax burden would further erode their income.

Imam said he still tried to meet his existing tax obligations. However, when money was tight, he had to reallocate spending, including money needed by his family.

He also feared that food prices could rise if the tax were implemented. But raising prices would not be easy, as customers might switch to other food stalls.

“If we plan to raise prices, that’s inevitable. But in reality, if we raise them, customers will leave. People now spend about Rp10,000 to Rp15,000 on a meal. If we increase prices, how much should we charge?” he said.