Joko Wants to Exempt Street Food Stalls From Restaurant Tax

The Jakarta Globe, October 6, 2013.


Jakarta Governor Joko Widodo on Sunday said he wanted to revise a much-criticized bylaw requiring street food stalls, locally known as wartegs, to pay a 10 percent restaurant tax.

“Why should we ask wartegs to pay a tax? It’s not like we’re lacking places that should be taxed,” Joko said. “Many big entities haven’t paid their taxes, so why should we make the small ones pay?”

Much to the dismay of both warteg owners and their low- to middle-income customers, the Jakarta administration, under then-governor Fauzi Bowo, passed the 2011 bylaw on restaurant taxes, which classifies street food stalls as restaurants.

“Restaurants are facilities providing food and or beverages subject to levies; they include restaurants, cafeterias, canteens, stalls, bars and the like, as well as catering services,” Article 1 of the bylaw states.

Article 3 of the same regulation says that any restaurant with a turnover of more than Rp 200 million ($17,400) a year, or around Rp 548,000 per day, is required to pay the 10 percent income tax.

Despite the fact that the regulation is still in place, implementation of the bylaw has been discouraged due to its unpopularity.

“The implementation [of the bylaw] has been delayed indefinitely,” Joko said. “We’ll ask for a revision.”



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