British Embassy takes action over Greenwood arrest

Rendi A. Witular, The Jakarta Post, Jakarta

The British Embassy in Indonesia is seeking to "free" its citizen, Mark Michael Greenwood, currently in jail for failing to pay Rp 45.8 billion (US$5.38 million) in tax arrears, an official said.

A press officer at the British Embassy, Faye Belnis, told The Jakarta Post on Wednesday that the embassy had been aware of the arrest, and that its staff were seeking to establish contact with Greenwood in an attempt to free him.

"The staff are going to be handling this matter. We have big concerns over the issue, which is why we are trying to sort this (problem) out," she said, without elaborating on what the embassy had in mind.

As a consequence of what has happened, the embassy is encouraging all British citizen in Indonesia to observe the taxation legislation of the Indonesian government, she said.

The Directorate General of Taxation ordered Greenwood to be sent to the notorious Cipinang penitentiary, East Jakarta, on Monday, without trial, for evading tax obligations since 1998.

Greenwood, an executive with an oil firm partner of state- owned oil company PT Pertamina, has been put in cell No.3, block H-3, along with Jasman Lim, an alleged tax evader who was earlier detained for failure to pay Rp 11 billion in tax arrears.

The tax directorate said 68 other tax evaders were awaiting imprisonment, including 16 expatriates.

One of the expatriates was nearly jailed this week, but his detention was postponed at the last minute after he agreed to pay 60 percent of his total tax arrears of Rp 42 billion, said the tax directorate.

A source at the directorate said the expatriate was a Japanese citizen.

Earlier, international business lobby groups, such as the International Chamber of Trade and the Jakarta Japan Club Foundation, 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 order without using a "17th-century" solution.

According to the groups, the detention order might have resulted from the tax office's frustration at the country's weak legal system in making sure people paid the correct tax.

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

While tax evasion is a problem, the directorate turns a blind eye to corruption and collusion within its jurisdiction, which cost the country trillions of rupiah in potential tax revenue every year, according to the business associations.