West Kutai demands KEM?s catering provider to pay local tax

The West Kutai regency in East Kalimantan has insisted that PT Prasmanindo Boga Utama (PBU), the provider of catering service for gold mining giant PT Kelian Equatorial Mining (KEM), to pay the so-called hotel and restaurant tax to the local administration.

The local Kaltim Post daily said that the regency?s revenue office met on Thursday with PBU management at the office of the deputy regent of West Kutai. Representatives of KEM also attended the meeting.

Meanwhile, PBU said that it had fulfilled its tax obligation by paying value added tax (VAT) to the central government. But the local government insisted that since the company has long been operating in the regency, it must also contribute to local development by paying the hotel and restaurant tax.

Since the launching of the new autonomy law last year, regional government including provincial and regency administrations have been aggressive to collect tax revenue to help finance their greater administrative power. Experts have said that this kind of euphoria could deter investors as they would risk paying double tax.(*)