GOING TO 'WARTEG' ? PAY YOUR TAX PLEASE!

By Andi Abdussalam

Jakarta, Dec 4 (ANTARA) - 'Warteg'  owners are opposed to a Jakarta regional government plan to impose a 10-percent sales tax on their businesses in 2011, especially on those with an annual turnover of more than Rp60 million.          Short for 'Warung Tegal,' 'Warteg' is an eatery  usually run by people  hailing from the Central Java town of Tegal and serving rice and typical dishes for lower income people.          "This policy will kill warteg businesses, which are  small scale ones  and serve as a means for economically weak people to eke out a living," Muhammad Jumadi, chairman of the Communication Forum of Tegal Students and Community (Forkommat), said.          The same objection was also raised by a number of Warteg owners.          "I reject the government policy to collect  a 10-percent sales  tax from Warteg because it will disadvantage our business," Yuni, owner of the 'Barokah' eatery , a Warteg in East Jakarta on Friday.          The Jakarta Tax Office said the Jakarta Regional Government would impose a 10 percent tax on small eateries including Warteg whose annual turnover exceeded Rp60 million.          "The tax will be imposed based on the principle of fairness. But we will set a limit, namely the tax is to be imposed on Warteg with a turnover of more than Rp60 million a year," head of the Jakarta Tax  Office,  Iwan Setiawandi said earlier.          He said  the legal basis of the plan to impose the tax was Law No. 28, 2009, on Regional Taxes and Regional Retributions which said that food stalls, cafeterias and all sorts of businesses  providing food and drinks  were taxable.          Iwan said actually it was part of the tax policy on restaurants but its imposition was later extended to a larger number of objects which include small eateries. "So, we will take taxes not only from  Warteg but also from all kinds of food stalls whose turnover is over Rp60 million," Iwan said.          With the imposition of such a tax, the Jakarta Regional Government hoped it would be able to collect about Rp50 billion in annual taxes from over 2000 wartegs in Jakarta.          The Jakarta Tax  office was now taking stock of small eateries  with a turnover of more than Rp60 million per annum. The stock taking covers the kinds of eateries ranging from Warteg to small bean porridge, instant noodle, bakso (meat ball) and chicken soup eateries.          Iwan said the reason for the Jakarta regional administration to impose a sales  tax on these small cooked food selling businesses  was because many of them had high turnovers. "If we do not impose a tax on them  it would be unfair to eating establishments like  restaurants which are required to pay taxes," he said.          However, Forkommat was of the view that the policy would kill the warteg businesses. Muhammad Jumadi said that there were still many more strategic ways the Jakarta government could take to increase its original income than imposing a sales tax  on Warteg.   "It can increase its income by mending the leakage of taxes collected from middle and upper-class restaurants," he said.          He said the regional government could mend the leakage by making use of information technology connected to middle and high class restaurants.  "If it does this, it means it takes a smart step, not a step that would kill small and informal businesses like Warteg. This will burden or even kill  businesses of small and marginalized people," the Forkommat chairman said.          He said that Warteg owners would stage a large scale rally in protest against the policy if the Jakarta Regional Government went ahead with its plan to impose a ten-percent sales tax on Warteg businesses.          "We once again express our objection to the planned imposition of the tax and we will take the necessary steps to protect our business that is done by those who mostly come from the low and poor groups of people," he said.          Therefore, Forkommat hopes that Jakarta Governor Fauzi Bowo is serious in stating  that his side will review the plan to impose the 10-percent tax. "We hope that the governor's statement would not merely be a lips service to calm down Warteg traders and their consumers who came from the lower bracket of people," Forkommat General Chairman Muhamad Jumadi said.          The organization of the Tegal natives is waiting for the governor to realize his statement where he said he would not impose the tax on weak people. "We hope that the governor will issue a statement affirming that the regulation will never be implemented," said Jumadi.          In separate place, Workers Union Federation of State-owned companies (FSP BUMN) also said it rejected the government plan to impose a sales tax on Wartegs.          "The imposition of taxes on Warteg will have impact on the increase of food prices at Wartegs. Warteg consumers are mostly daily laborers whose incomes are less than enough," chairman of  FSP BUMN Arief Poyuono said.***2*** (T.A014/A/HAJM/16:02/a014) 04-12-2010 16:23: