BPK audits customs office over possible irregularities

Rendi A. Witular, The Jakarta Post, Jakarta

The Supreme Audit Agency (BPK) will conduct an investigative audit of import duties collected by the Directorate General of Customs and Excise after discovering suspected irregularities during an earlier audit.

The deputy chairman of the BPK, Bambang Wahyudi, said the agency had found "indications of irregularities" in the collection of import duties during a routine audit of the directorate.

"This is a special audit, not a routine one. We are focusing on the collection of import duties to help maximize state revenue and prevent corruption," said Bambang.

The results of the investigative audit will be reported to the House of Representatives at the end of this year, he said.

However, the directorate denied it was the subject of a special audit.

"As far as I know, there is currently no special audit by the BPK here. If there is (an audit), I think it is just a routine one, which includes among other things auditing import duties," the directorate's spokesman, Susiwijono, said.

The customs directorate has been criticized for years for failing to curb collusion between the directorate's officials and smugglers and dishonest importers, which has caused the government to suffer massive losses.

While smugglers pay no import duties, many importers undervalue the goods they are importing to cut their duty payments.

Officials from the directorate admitted that in 2001 and 2002 alone, thus undervaluation caused the government to lose about Rp 17 trillion (US$2 billion) in potential revenue.

The directorate has drawn fire from many parties, including the government, for its failure to meet import duty targets contained in the state budget, despite increases in the country's imports.

In 2002, for example, the directorate collected Rp 10.6 trillion ($1.2 billion) in import duties, compared to the budget target of Rp 11.8 trillion. This despite a 4 percent increase in import volume to $31.2 billion that year.