A hotel association has urged the Jakarta administration to provide assurances to its members that the upcoming online tax system will not prove detrimental to business.
Diyak Mulahela, chairman of the Association of Jakarta Hotel Controllers, part of the Indonesian Hotel and Restaurants Association (PHRI), said Wednesday the city had full authority to apply the online tax system to control its tax revenue, but several employers were still questioning its safety.
"Basically we're concerned our existing hotel systems may be disrupted when connected to the new tax system," Diyak told The Jakarta Post over the phone Wednesday.
"Second, we're also worried our systems might be attacked by viruses after the connection."
He added the city had to be able to assure employers that the online system was free and would not mix up municipal and state taxes.
The central government and the city administration once claimed an Internet service as falling under their tax jurisdiction, forcing the service to pay twice, Diyak said.
That dispute was resolved in August after the city administration laid claim to the revenue from Internet connections.
Diyak said that previously, employers were afraid online systems would result in confidential data being leaked to competitors.
Governor Fauzi Bowo guaranteed the tax office would use its discretion in releasing data to the public.
"There should be no question of whether we will uphold the law or not," he said.
"We will only take data concerning income tax."
He added the administration would have no problem as long as companies did not try to avoid paying tax.
Fauzi said earlier the city planned to apply the online tax system to 800 taxpayers in the hotel, restaurant, entertainment and parking sectors by January 2010.
With the system, the city's tax office will be able to access certain data from the taxpayers.
The city planned to open a bid for a company to provide equipment and technology for the system, but postponed it to improve the requirement list.
"We want to make sure the requirements are good enough to answer taxpayers' concerns," city secretary Muhayat told the Post.
"We'll use a company that uses software and *Internet* networks that provide a feeling of security to taxpayers."
He added similar online tax systems had been successfully applied in major cities across the country, and said he was sure Jakarta could manage it.
Diyak said he expected the application of the online system to still allow hotel managers to give discounts for promotional events, adding tax officers often got suspicious when hotels gave discounts to attract guests.
"Currently the supply of rooms surpasses demand from guests, so when hotels offer discounts to attract guests, please don't assume we're trying to avoid paying tax," he said.
Diyak said the occupancy rate for 45,000 hotel rooms in Jakarta was only 60 percent.
"Let's work together to achieve the income tax target of Rp 1.7 trillion from hotels, restaurants and entertainment establishments this year," he said.
Tax revenue from the three sectors last year amounted to Rp 1.5 trillion.
