Government vows to crack down on tax evasion

JAKARTA (JP): Finance Minister Bambang Sudibyo said on Wednesday the government would crack down on tax evasion, which is estimated to cost the government billions of dollars a year.

Bambang said that his office had stepped up cooperation with the Attorney General's Office, including exchanging information on individual taxpayers, to curb tax crime.

Speaking at a joint media conference with Attorney General Marzuki Darusman, Bambang said people guilty of tax crimes faced a maximum six-year jail term or fines of up to four times the amount of unpaid tax.

Bambang said that in the 1991/1992 fiscal year, the amount of taxable income not reported to the directorate general of taxation was estimated at around Rp 27.7 trillion (US$3.12 billion).

This figure, he added, had jumped to more than Rp 170 trillion in the 1999/2000 fiscal year alone.

He said that the amount of taxable income not reported to the tax authorities during the 1990s cumulatively totaled Rp 714.5 trillion, resulting in state losses of some Rp 130.86 trillion in income tax.

He said the amount of uncollected income tax in 1991/1992 was around Rp 5.08 trillion, increasing to Rp 31.08 trillion in 1999/2000.

"This amount should have been very significant to help finance the state budget and stimulate the economy," Bambang said.

But the finance minister did not explain how he calculated such figures.

Bambang said the government did not like conducting criminal investigation and prosecuting taxpayers, but it would be forced to take such measures if taxpayers violated existing rulings.

He said collecting tax revenues was an important element in the drive to create a healthy and credible fiscal policy which, in turn, would help the country's crisis-hit economy recover.

"Tax compliance in Indonesia is still very low," Bambang said, pointing out that out of the more than 600,000 corporate taxpayers, only around 200,000 regularly submitted annual tax return forms, and out of 1.31 million registered individual taxpayers, less than 50 percent filed tax returns.

He said that out of the country's 200 million people, only around 1 percent were registered as taxpayers.

Marzuki vowed that his office would strongly support the finance ministry's campaign to curb tax crime.

"The Attorney General's Office will fully support the efforts of the finance ministry to protect state assets and revenues," he said.

Elsewhere, director general of taxation Mahfud Sidik said that his office was currently investigating 18 tax-related crimes, 11 of which would soon be handed over to the Attorney General Office for further investigation.

Mahfud said that the 11 cases involved around Rp 1.3 trillion in unpaid tax.

He warned tax officials not to collude with taxpayers to evade payment, warning that errant officials would be dealt with firmly.

"There's always a possibility for taxpayers to collude with tax officials," Mahfud said. (rei)