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.