Examine foreign investment firms failing to pay taxes

Examine foreign investment firms failing to pay taxes

It is reported that 3,500 out of 4,850 companies set up under
the foreign investment scheme have, for a variety of reasons,
failed to pay taxes, inflicting losses on the state totaling
trillions of rupiah. This is a serious case especially because
the government has made tax receipts the pillar of its revenues
for the 2003 state budget. For example, tax receipts make up 73
percent of the state's spending.

In its efforts to reach the target of tax receipts, the
government has not only raised tax tariffs but has also widened
the variety of taxable goods and services, acts that will
eventually generate a greater burden on the people.

Therefore, media reports that 70 percent of foreign-investment
companies are yet to pay their taxes hurts the public's sense of
fairness, especially when it was later said that many of them
were involved in transfer pricing to engineer their financial
statements so that it looks as if they sustained losses and were
exempted from paying taxes.

It is very clear these foreign-investment companies have
violated our laws and this cannot be tolerated. We must uncover
their transfer pricing practices though it seems like a Herculean
task.

The directorate general of taxation must never lose heart in
tracing and examining these cases. Efforts must be made to ensure
that foreign-investment companies comply with their tax
obligations. In this way, the budget deficit can be bridged.

-- Suara Karya, Jakarta