AGO Names Two Suspects in PT TPL Transfer Pricing Case

The Attorney General’s Office (Kejagung) has named two individuals as suspects in a corruption case related to transfer pricing by PT Toba Pulp Lestari (TPL) spanning the period from 2008 to 2025. The Director of Investigation at the Junior Attorney General for Special Crimes, Saiful Bahri Siregar, stated that the investigation found Toba Pulp Lestari conducted exports using under-invoicing by reporting the product as paper grade pulp or bleached hardwood kraft pulp (BHKP). “In fact, based on its characteristics, use, and market price value, the product is dissolving pulp. The HS Code for the export was altered,” he said during a press conference on Wednesday (12/8). Saiful explained that the change in the reported HS Code meant the recorded value of Toba Pulp Lestari’s product from 2008 to 2025 did not reflect its true condition or was reduced. He explained that as a result, the sale of dissolving pulp products under the name High Alpha Pulp to PT Asia Pacific Rayon or its affiliated companies was not properly recorded. “This consequently led to a reduction in the corporate tax value that should have been received by the state,” he clarified. To facilitate the scheme, he said, Toba Pulp sought assistance from suspects BP and SR, employees of the Directorate General of Taxes at the Ministry of Finance who were assigned as supervisors in Toba Pulp Lestari’s tax audit. He explained that both individuals neglected their supervisory duties and failed to review the Audit Work Papers and Audit Findings Report. Consequently, the audit was not based on the audit programme but rather on reports prepared by the suspects. “For these actions, the suspects received sums of money from PT TPL,” he stated. As a result of their actions, Saiful said the state suffered a financial loss in the form of improperly reduced revenue. “Meanwhile, from our investigation, a provisional loss value of Rp2 trillion has been obtained, and the official result will be provided by the auditor team,” he said. For their actions, the two suspects are charged under Article 603 in conjunction with Article 20 letter a or c of Law Number 1 of 2023, and subsidiarily Article 604 of Law Number 1 of 2023. Both have also been detained at the Salemba Detention Centre branch of the Attorney General’s Office for the next 20 days.