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)