British citizen imprisoned for alleged tax evasion

British citizen imprisoned for alleged tax evasion

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Taxation has sent a British citizen
directly to prison without trial for alleged failure to pay tax
arrears amounting to Rp 45.8 billion (US$5.38 million).

It was the second such imprisonment this month of a tax
evader.

Chief warden of the notorious Cipinang penitentiary Djoko
Mardjo told The Jakarta Post on Tuesday that the tax directorate
had imprisoned a man named Mark Michael Greenwood for failing to
pay taxes to the state.

"The tax directorate has sent in a British citizen under the
name of Mark Michael Greenwood. I forgot the name of his company,
but he is an executive at an oil firm in partnership with state-
owned oil company PT Pertamina," said Djoko.

He said that Mr. Greenwood would share a cell with Jasman Lim,
another convicted tax evader who was detained recently for
failure to pay Rp 11 billion to the tax man.

The two, however, would be allowed unlimited visits from
friends and family, but that required prior approval from the tax
directorate, Djoko said.

According to the tax directorate, the expatriate has not paid
income taxes since 1998.

Spokesman of the Ministry of Finance Maurin Sitorus told the
Post that Minister of Finance Boediono had authorized the
detention of the expatriate pending payment of his taxes to the
state.

He explained that before issuing the decree, the minister had
summoned officials from the British Embassy to help settle the
problem, but to no avail.

The tax directorate, under the ministry of finance, said there
were 68 other tax evaders awaiting imprisonment, including 17
expatriates.

Director General of Taxation Hadi Purnomo said that there was
one other expatriate who was nearly jailed this week, but his
detention was postponed after he agreed to pay 60 percent of his
total tax arrears of Rp 42 billion.

Under a new regulation, the tax directorate can send tax
evaders to jail without a standard court trial.

According to the regulation, the accused can file an objection
with the administrative court while in detention and if he/she
wins an appeal, the directorate will pay compensation of Rp
100,000 for each day of detention and publish an announcement in
a domestic newspaper to restore the reputation of the person
involved.

Earlier, international business lobby groups criticized the
directorate's move, saying it would further undermine the
country's investment climate.

They said there were other ways of bringing tax evaders to
bear without using a "17th century" solution.

The tax directorate has been aggressively trying to collect
tax arrears. In the first nine months of this year tax collection
has increased by 38 percent to Rp 18 trillion from Rp 13 trillion
in the same period of last year.

However, at the same time, corruption and collusion at the
directorate, apparently in the trillions of rupiah, was still
rampant, while the government has tended to turn a blind eye
toward the problem, according to the business associations.