Govt launches probe into tax bribery

Govt launches probe into tax bribery

JAKARTA (JP): Director General of Taxes Anshari Ritonga said
here on Wednesday his office had not yet found any indications of
bribes from Japanese contractors to local tax officials, but
vowed to continue the investigation.

Ritonga said his office had counted 18 Japanese-affiliated
firms under the Kajima name and 18 others under the name of
Taisei, and it was not yet clear which companies were involved in
the suspected bribes.

"Kajima Corp. has 18 subsidiaries in Indonesia. It means they
must have been involved in at least 18 projects. This also
happens with Taisei Corp, which has 18 subsidiaries here,"
Ritonga said.

It was not yet clear which projects they were involved in, and
whether they were government or private projects.

If the companies had worked on government projects funded by
foreign loans, they were not required to pay any income tax or
value-added tax, Ritonga said.

"It means it was not necessary for them to bribe tax officials
to get tax relief," Ritonga said.

It was the Yomiuri Shimbun newspaper which uncovered the
alleged bribes by Japanese firms to Indonesian tax officials,
implicating Kajima Corp. and Taisei Corp.

Quoting Tokyo tax authority sources, the newspaper reported
that Kajima Corp alone paid 80 million yen (US$660,000) in
suspected bribes to Indonesian tax officials.

A Kajima spokesman was quoted by the newspaper as saying that
the payments were made to "settle tax negotiations".

The payments suggested deep-rooted corruption in the
Indonesian tax authority and the collusion of officials with
Japanese construction firms, the paper said. Such payments were
routine for Japanese firms working in the country.

Other Japanese contractors have also been implicated in
suspected illegal payments to Indonesia.

Kajima won 21 construction contracts in Indonesia between 1994
and 1997 worth a total 22 billion yen, the paper said.

Meanwhile, Coordinating Minister for Economy, Finance and
Industry Ginandjar Kartasasmita said the government had assigned
Coordinating Minister for Development Supervision and
Administrative Reforms Hartarto to launch an investigation into
the bribery allegations.

Ginandjar wrote a letter, dated April 12, to Japanese
Ambassador to Jakarta Takao Kawakami, asking the Japanese
government to help in the investigation.

He said the incident could affect relations between the two
countries and could even influence the Japanese public's
willingness to assist the Indonesian government in its economic
recovery program.

"We are hopeful that the government of Japan will be able to
share with the government of Indonesia any information from your
investigation into corruption, bribery, or other illegal acts,
involving Japanese private companies and Indonesian government
officials.

"To the extent that information can be provided by the
Japanese authorities, both the quality and the speed of our
investigation will be enhanced," Ginandjar said in his letter.
(rid)