New eatery levy ‘won’t affect small businesses’
Andreas D. Arditya, The Jakarta Post, Jakarta | Thu, 02/02/2012 11:29 AM
The Jakarta administration has affirmed its position on a new levy on restaurants, which could affect those ubiquitous small blue-collar eateries known locally as warteg, telling those who oppose the ruling to take their concerns to court.
Jakarta Tax Office Agency chief Iwan Setiawandi said on Wednesday that the new levy, which took effect on Jan. 1, targeted restaurants with a relatively large turnover.
“We have calculated that the new tax will not affect small businesses. It has been discussed with the City Council and approved by both the Home Ministry and the Finance Ministry,” Iwan said.
Recently passed Bylaw No. 11/2011 on Restaurant Tax imposes a 10 percent tax on restaurants, including warteg, canteens and cafeterias, whose annual turnover is equal to or more than Rp 200 million (US$22,200) or Rp 550,000 per day.
Warteg are restaurants — sometimes free-standing, sometimes roadside stalls — that offer inexpensive food (and sociability) to a predominantly blue-collar clientele in a manner evoking an American diner.
He said that the Bandung administration in West Java and the Surabaya administration in East Java also imposed similar taxes on restaurants with incomes of more than Rp 120 million per year and Rp 180 million per year, respectively.
The imposition of the tax had been delayed for a year due to mounting opposition from various parties, including the Indonesian Consumers Foundation (YLKI), which argued the policy would hurt low-income businesses.
Initially, the city planned to tax every establishment whose daily sales total was Rp 167,000 or around Rp 60 million per year.
Iwan said the office believed the tax threshold was high enough to avoid affecting small businesses and that any party who objected the regulation could file a judicial review to the Supreme Court.
Separately, Edi Gurning, a lawyer from the Jakarta Legal Aid Institute (LBH Jakarta) said that his institution had received an objection report from warteg owner association IKBT and was studying the case.
