Forestry taxes fall short in Riau: Timber expert

Forestry taxes fall short in Riau: Timber expert

Haidir Anwar Tanjung, The Jakarta Post, Pekanbaru, Riau

A timber association executive warned of irregularities in the
local tax payments on forestry products to the province of Riau,
saying pulp and paper companies should have paid six times more
than they had done so far.

Chairman of the board of experts at the Indonesian Timber
Business Association (APKOI), Viator Butar-butar also denied a
report by The Jakarta Post on April 4 in which he was quoted as
accusing two major pulp and paper companies of withholding
reforestation funds.

"We never specifically mentioned reforestation funds," said
Viator in a statement. He said that what he meant was forest
resources tax (PSDH).

Viator questioned the PSDH payments by giant pulp and paper
companies PT Indah Kiat Pulp & Paper and PT Riau Andalan Pulp &
Paper.

He said Riau received a total of Rp 48 billion (about US$5.4
million) in 2001, while the province should have earned at least
Rp 320 billion from PSDH payments.

Indah Kiat and Riau Andalan, he explained, needed at least 10
million cubic meters of various forest raw materials last year.

That amount was subject to a PSDH charge of Rp 32,000 per
cubic member. "Therefore Riau's PSDH income should have been at
least Rp 320 billion," he said adding this should have been the
payment from Indah Kiat and Riau Andalan alone.

Viator said he had reported his findings to the Riau
provincial legislative.

He did not rule out the possibility of collusion between the
companies and officials at the Riau forestry office.

"So far I can't determine how this could have happened and who
is doing this. But the gap is so huge based on the two companies
alone," Viator said.

However spokesmen of both companies dismissed the charges,
saying they were groundless and absurd.

Indah Kiat spokesman Afrizon said the company obtained its raw
timber after first securing a clearance from the forestry
ministry.