Government vows to crack down on tax evasion

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)