Four executives go to prison for tax fraud

JAKARTA (JP): Four executives of private companies were given nine years in prison for tax evasions which caused the state losses of more than Rp 44 billion (US$18.76 million).

The four, tried separately in Central Jakarta District Court yesterday, were found guilty of establishing companies to issue fictitious value-added tax invoices, the panel of judges said. The judges also said that the defendants sold the fictitious value-added tax invoices for between six and 30 percent of their face value, between March 1993 and June 1995.

Defendants Hartono, 46, and Raden Ign. Suarisman, 57, were tried by a team of judges led by I.G.K. Sukarata, while defendants Baharuddin Umar, 46 and Tonny Effendy, 31, were tried by a panel of judges presided over by Sartono.

"The defendants Hartono and Suarisman must pay back Rp 150 million and Rp 25 million respectively in addition to the Rp 15 million fine," Judge Sukarata said.

Tonny and Baharuddin were also told by Judge Sartono to pay Rp 200 million and Rp 80 million respectively in compensation to the state.

Tonny said he wanted to appeal, while the three other defendants said they were still considering their options.

Prosecutor M. Djaenuddin Nare had asked the court to sentence Hartono and Suarisman to 14 years each. Prosecutor R. Moekiat, who indicted Baharuddin and Tonny, asked the court to sentence the defendants for 14 years as well.

The prosecutors charged the defendants with a 1997 law on corruption.

Some businessmen use fictitious tax invoices to produce tax rebates for their companies by claiming to have carried out export transactions with other firms.

Businessmen are obliged to collect 10 percent in value-added tax when consumers make purchases, and pay this to the state.

The exporters are entitled to claim back any tax paid to the state when the goods are exported. The defendants' companies are legal and are allowed to issue tax invoices. But the invoices were fake because no real transactions were made, the judges said.

September last year the Central Jakarta District Court sentenced a businessman to nine years in jail and fined him Rp 30 million for defrauding the state of Rp 15 billion in taxes. (sur)