Crack down planned on tax evaders<\/p>\n
JAKARTA (JP): The government announced on Thursday it would
\nsoon launch a massive crackdown on companies, institutions and
\nindividuals suspected of tax crimes.<\/p>\n
Coordinating Minister for the Economy Rizal Ramli said the
\ngovernment had found preliminary evidence of tax crimes by \"100
\ninstitutions and 50 wealthy individuals\".<\/p>\n
\"I have asked the director general of taxation to start a
\nmassive investigation next week,\" Rizal said during a joint media
\nconference with Attorney General Marzuki Darusman, State
\nIntelligence Coordinating Board (Bakin) head J. Arie Kumaat,
\ndirector general of taxation Machfud Sidik and the National
\nPolice deputy chief.<\/p>\n
\"From now on we mean business ... So please pay your taxes in
\nfull,\" Rizal said.<\/p>\n
He declined to name the institutions and individuals suspected
\nof tax crimes.<\/p>\n
The coordinating minister said Indonesia had a good tax law,
\nbut the enforcement was weak. As proof, he said that during the
\npast 20 years, only 41 cases related to tax crimes had been
\ninvestigated.<\/p>\n
\"This means only five cases per year ... But I think the
\nincidence of tax crimes was much greater than that.<\/p>\n
\"But today will be the turning point in the enforcement of the
\ntax law in the country.\"<\/p>\n
Director general of taxation Machfud Sidik said potential
\nstate losses due to the suspected tax crimes committed by the 100
\ninstitutions was about Rp 4 trillion (US$439.56 million), while
\nfor the 50 individuals this figure was some Rp 300 billion.<\/p>\n
He said violations of the tax law were punishable by a penalty
\nof up to four times the amount of the taxes due, or imprisonment.<\/p>\n
Marzuki said legal measures were more effective than
\nadministrative penalties in ensuring compliance with the tax law.<\/p>\n
\"If there are two options, the Attorney General's Office
\nstresses legal sanctions ... so that the message becomes much
\nclearer and louder.\"<\/p>\n
Marzuki said this warning also was directed at those who in
\nthe past amassed money using a variety of methods which were
\nlegally questionable.<\/p>\n
Marzuki did not provide any names, but the family and
\nassociates of former president Soeharto allegedly abused their
\npower to raise funds from the public and state enterprises
\nwithout paying taxes on their income.<\/p>\n
However, many analysts see the current administration of
\nPresident Abdurrahman Wahid, the country's first democratically
\nelected president, as impotent in taking legal action against the
\nSoehartos and their cronies.<\/p>\n
The authorities, for example, have been unable to put
\nSoeharto's youngest son Hutomo \"Tommy\" Mandala Putra in jail
\nafter the Supreme Court sentenced him to 18 months in prison for
\na land swap deal with the State Logistics Agency in 1995 and the
\nPresident refused to pardon him.<\/p>\n
Marzuki also appealed to the public to report any tax
\nofficials who abused their authority.<\/p>\n
The government is under pressure to boost domestic revenue
\nthrough taxes in a bid to lower the country's dependence on
\nforeign loans.<\/p>\n
The state budget over the next several years will be heavily
\nburdened by the huge cost of the government's bank restructuring
\nprogram, estimated to cost more than Rp 600 trillion.<\/p>\n
Machfud said the current tax ratio (tax receipts against gross
\ndomestic product) is 11.1 percent, a figure the government
\nintends to increase to 12.3 percent next year and 16.1 percent in
\n2004.<\/p>\n
\"We want tax revenue to increase by between 20 and 25 percent
\neach year.<\/p>\n
\"Without law enforcement we can't achieve this target,\" he
\nsaid.<\/p>\n
Machfud said tax compliance in the country was relatively low
\ncompared with neighboring nations.<\/p>\n
He pointed out that of the country's more than 200 million
\npopulation, only 1.3 million people had tax identification
\nnumbers, or NPWP, and only 600,000 entities were registered as
\nregular taxpayers.<\/p>\n
He estimated potential tax revenue lost over the past 10 years
\nbecause of inadequate collection efforts and low tax compliance
\nat Rp 130 trillion. (rei)<\/p>",
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"sponsor": "Okusi Associates",
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