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Food stall owners slam Jakarta over new restaurant tax

Source
Jakarta Globe - February 22, 2012

Ronna Nirmala – Streetside food stall owners dished it out to Jakarta's deputy governor on Tuesday, angry over plans for a new restaurant tax in the capital.

A number of small business owners from the Tegal Association met with Jakarta's second-in-command, Prijanto, to complain about a 2011 local regulation which came into force this year and levies a tax on food outlets with a daily turnover of Rp 550,000 ($61) or more.

The most common type of budget food stall in Jakarta is called a warung Tegal, or warteg for short. Tegal Association general secretary Arief Mukhtiono said the regulation would do more harm than good.

"As far as we are concerned, this is like trawling for tax. It won't just catch the big fish, but will affect the little fish too," Arief said. "In other words, the unemployed will end up paying for this, too."

Arief said warteg owners were concerned about the consumers who patronize their stalls but earn less than minimum wage. The government should remember, he said, that the tax would hit those who could least afford it.

"We hope this meeting was useful. The response from the deputy governor was positive. He said he would take the issue up with the legal services and taxation office and ask them to review the policy," the businessman said, adding: "Hopefully that wasn't a hollow promise."

Arief said the delegation had chosen to meet the deputy governor because Jakarta Governor Fauzi Bowo had already closed the door on negotiations over the policy. He also said it was not a problem that Prijanto's term in office was due to be over soon.

"The important thing is that we discuss this with the relevant authorities in the city administration. He [Prijanto] is a representative of the people, so he has a responsibility to defend their interests," Arief said.

He said the Tegal Association doubted the validity of the data used to pinpoint the daily turnover threshold above which a food stall must pay taxes. He also said he believed that the city had used "some random survey on the Internet" rather than conducting a proper survey on the streets of the capital.

He said the Tegal Association would conduct its own survey of turnover if necessary because it did not trust the finding that most wartegs turned over less than Rp 550,000 per day, or Rp 200 million annually.

"The tax officials arrived at the Rp 200 million figure via an Internet survey, so we are offering to make an independent study team to examine this, so that the threshold figure used is fair for everyone," Arief said at City Hall.

In addition to lobbying, several warteg owners were in the process of filing for a judicial review of the administrative decision behind the regulation, Arief said, adding that they were being assisted by the Indonesian Legal Aid Foundation (LBH Jakarta).

He said the ex-minister for finance, Rizal Ramli, was prepared to give evidence in the administrative appeal.

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