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ack of information on how to get business licenses properly in Bandung, West Java, seems to have led applicants to pay illegal levies in their efforts to get business licenses.

Eka Rahmat Jaya, 25, said that the complicated bureaucracy to have his knitting business legalized forced him to pay unnecessary levies.

He experienced problems when trying to get a license for his business domicile. '€œIt turned out that I have to get it from the subdistrict and district administrations. Without baksheesh the process will take a long time,'€ Eka told The Jakarta Post over the weekend.

He said to get the domicile license he spent Rp 700,000 (US$48).

He said he did not mind spending money for the neighborhood unit (RT) and community unit (RW) to go to and from the subdistrict administration to get the license processed.

'€œI consider it to be compensation money,'€ he said.

What he could not understand, Eka said, was that the subdistrict and district administrations also asked for money to do their jobs. '€œThey would not accept Rp 200,000. They could not,'€ he said.

The cost of such illegal levies, according to Eka, differed depending on the domicile areas.

From the information he received from colleagues, he said, an employer in northern Bandung would need a minimum of Rp 5 million to get his business entity or Commanditaire Vennootschap (CV) officially legalized.

'€œFor me, as a businessman, it does not matter where the money goes. What matters the most is that the business runs smoothly. Indeed it should have been for free,'€ Eka said.

He added that with the domicile license he got, he would apply at the Agency for the Assessment and Application of Technology (BPPT) office for a legal entity for his knitting business that he has been running for five years.

Bandung city BPPT has since late May 2015 provided online licensing services for 24 different licenses. Of these, only three require retributions or fees. They are building permits (IMB), hinder ordinances (HO) or disturbance permits and transportation route permits.

'€œI have just learned that no payment is needed to get a legal entity permit,'€ said Eka after being informed about the matter.

Eka was not the only one. The same confusion in legalizing a business entity was also experienced by Rahmat Mulyana, who said he spent up to Rp 3 million to get the license for his management consultant service company.

Rahmat said that at first he used the service of a notary to get the license issued but it took a very long time. Someone from the district administration later offered him a service to get it done in return for
Rp 2.5 million in fees.

'€œThat excluded the Rp 200,000 and Rp 300,000 levies that I paid at the subdistrict and district administrations, respectively,'€ Rahmat said, adding that he finally needed only a week to get the license with the help of the person from the district administration.

Chairman of Bandung City Chamber of Commerce and Industry, Deden Y. Hidayat, said that he had been receiving complaints from advertisement companies with regard to licensing.

The city administration, according to Deden, had implemented an advertisement licensing moratorium, the execution of which was unclear. And as a result, authorized employers could not extend their licenses.

Unfairness, he added, had also been committed by the administration in terms of taxes as the same stern action was not conducted for employers having no business license.

'€œAs a result, illegal businesses collect profits without paying taxes while authorized ones have to obey tax regulations,'€ Deden said.

Other complaints, he said, came from entertainment employers who expressed objections against tax retributions of 35 percent and against night entertainment operation hour limitations.

A survey conducted by Transparency International Indonesia (TII) in May 2015 ranked Bandung as the most corrupt city and the lowest in competitiveness.

The survey, which involved 1,067 companies as respondents, revealed that bribery in the capital city of West Java Bandung was 12 percent of the production cost.