Banks forge reports, evade taxes

JAKARTA (JP): A number of private banks manipulate their financial reports to evade tax payments, Tax Director General Fuad Bawazier disclosed yesterday.

Fuad refused to name which banks were engaged in such practices but said that one of them was caught "red-handed" only recently.

The alleged financial manipulation was unveiled at a hearing with the Finance and Trade Commission of the House of Representatives.

A number of private banks have, at least, two different financial reports which they use for different purposes, he charged, adding that a financial statement showing poor performance is usually submitted to the taxation office to seek lower tax payments and another one, indicating high achievement, is submitted to Bank Indonesia, the central bank, to seek higher credit points.

"Unfortunately, a bank recently filed with our office the one meant for Bank Indonesia," he told the House members of his finding.

"When we charged a high tax, the bank asked for a tax reduction. It later admitted that it filed the wrong financial statement." he said of the bank's technique in manipulating tax payments.

He said that the bank, instead of receiving a tax reduction, was fined for its practice. In addition, it was also reported to the central bank for the wrong doing.

Fuad said that his office also found a number of other banks manipulating their financial statements after assessing their real financial reports.

The tax office is allowed to verify a bank's financial accounts despite the banking secrecy law.(hen)