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Errant Taxpayers Threatened with Company Closure

Badung Tourism Official Wants Hotels and Restaurants who Don't Pay Their Taxes Closed.


Bali News: Errant Taxpayers Threatened with Company Closure
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(6/30/2008)

The Head of Badung's Regional tourism office, Made Subawa, is quoted in NusaBali as threatening to yank the operating licenses of hotels, restaurants and entertainment centers in Bali who are chronically delinquent in meeting their hotel and restaurant tax obligations.

Subawa explained that one of the requirements of his office for all applications for the renewal of a company's operating license (SIUP) is a letter of recommendation from the local tax authority (DISPENDA). "If they have that letter then there is no problem and we can extend their SIUP," he said.

Bali Garden Hotel Case

Responding to reports that the Bali Garden Hotel is refusing to settle past tax bills, claiming those charges were incurred by the Hotel's former management, Subawa said the current management of the hotel is responsible for the tax liabilities of past management teams. Emphasizing his point, Subawa said: "They are still the Bali Garden. Meaning they must pay their debts, even when they replace their management."

Subawa told NusaBali there is little pressure his office can bring to bear on the management of the Bali Garden Hotel because, as a starred hotel, the decision on whether or not to extend the propertyís operating license rests with the provincial tourist office. In order to improve tax enforcement, Subawa has formally asked the provincial government of Bali to move the power to authorize all tourism licenses in Badung to his regional government.

A Growing List of Delinquent Tax Payers

According to Nusa Bali, Commission C of Badung's Regional House of Representatives has identified the Bali Garden Hotel and Sofitel Seminyak as two hotels with the largest unpaid tax bills.

Bali Garden Hotel's legal representative, Ketut Widya, has told the press that the hotel does not wish to pay its outstanding tax bill of Rp. 3.7 billion (US$398,000) incurred under a former management regime at the hotel. The Bali Post reports that the Sofitel Seminyak owes Rp. 5.6 billion (US$602,000) in outstanding taxes.

In a separate report, NusaBali reports that a number of hotels and restaurants have been given a two-week deadline from June 23 to pay at least 50% of their outstanding tax bills before unspecified administrative steps will be taken against their businesses. Among the companies receiving the deadline were the Hotel Ramada Resort Benoa, Ulam Restaurant at Pantai Mengiat - Nusa Dua, and the Sama-Sama Restaurant in Kuta. The paper reports that Hotel Ramada Resort Benoa owes Rp. 4 billion (US$430,000); Sama-Sama Restaurant owes Rp. 1.24 billion (US$133,300); and Ulam Restaurant owes Rp. 1.4 billion (US$150,000).

The Badung House of Representatives estimate that the total amount of delinquent Hotel and Restaurant taxes due in their region is Rp. 32.7 billion (US$3.5 million).

The Hotel and Restaurant tax is the 11% tax levied by hotels and restaurants on all customers' bills, meaning the delinquent hotels have not only failed to pay their taxes but actually misappropriated tax money collected to the companys accounts.


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