Chinese-Owned Steel Mill Generated $557 Million in Sales but Paid\nLess Than $1.1 Million in Taxes: Purbaya<\/p>\n
Jakarta. The Finance Ministry is investigating a Chinese-owned steel\nmanufacturer in East Jakarta after preliminary findings indicated the\ncompany generated nearly Rp 10 trillion ($557 million) in sales while\npaying less than Rp 20 billion ($1.1 million) in taxes.<\/p>\n
Finance Minister Purbaya Yudhi Sadewa disclosed the findings after\nconducting an unannounced inspection at the company\u2019s facility in the\nPulogadung industrial estate, one of Jakarta\u2019s largest manufacturing\nhubs, on Thursday.<\/p>\n
He said the visit followed initial indications of business practices\nthat may have allowed the company to significantly reduce its tax\nobligations relative to the scale of its operations.<\/p>\n
\u201cThere are early indications that the company engaged in business\npractices that were not fair, resulting in lower tax payments, including\nvalue-added tax and corporate income tax,\u201d Purbaya said.<\/p>\n
\u201cWe requested clarification from the company and asked it to provide\nrelevant documents so we can objectively assess its business\nactivities.\u201d<\/p>\n
According to Purbaya, authorities have requested a broad range of\nrecords, including import documents, weighing and receiving records,\nsupplier data, proof of payments, corporate bank accounts, sales and\npurchasing ledgers, inventory records, and employment data, including\ninformation on foreign workers.<\/p>\n
The finance minister said the government is examining whether certain\ntransaction structures or reporting practices may have affected the\ncompany\u2019s tax liabilities.<\/p>\n
\u201cBased on the preliminary data, it is clear that tax payments appear\ndisproportionately low compared with sales approaching Rp 10 trillion,\u201d\nhe said.<\/p>\n
\u201cThe taxes paid may have been less than Rp 20 billion. That is\nextremely small for a business of this size. We suspect there may be\nloopholes that were used to reduce tax payments to the state.\u201d<\/p>\n
Purbaya emphasized that the investigation is not intended to\ndiscourage foreign investment or target Chinese businesses operating in\nIndonesia.<\/p>\n
Instead, he said, the government\u2019s objective is to ensure that all\ncompanies compete on equal terms and comply with Indonesian tax and\ntrade regulations.<\/p>\n
\u201cI stressed to the company that my visit was not intended to shut\ndown its business,\u201d Purbaya said. \u201cOur goal is to ensure that business\nis conducted fairly so that competition within Indonesia\u2019s steel\nindustry remains fair.\u201d<\/p>\n
The minister reiterated that Indonesia remains open to foreign\ninvestment, including investment from China, provided companies comply\nwith applicable laws and regulations.<\/p>\n
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