Govt unlikely to recover tax and duty losses: Official

Govt unlikely to recover tax and duty losses: Official

Rendi A. Witular, The Jakarta Post, Jakarta

The government will most probably never recover billions of
dollars in unpaid import duties and taxes owed by the country's
dishonest importers as it has no idea as to their whereabouts, a
governmental official has said.

Director general of customs and excise at the Ministry of
Finance Eddy Abdurrahman said his officials had tried to find the
importers but their efforts had not borne results as none of the
importers lived any longer at the addresses stated in the
documents held by the agency.

"We must say that we have problems in locating the dishonest
importers as the addresses that we have in our database turned
out to be fake.

"I apologize for making no progress in recovering the unpaid
duty and taxes. However, we will try our best," said Eddy.

He said his office had asked for police assistance in locating
the negligent importers, but thus far none had been found.

Earlier, Eddy said the state had lost Rp 17 trillion in
revenue from unpaid import duties, and luxury and value-added
taxes between 2000 and 2001. The losses were estimated at about
Rp 8 trillion in 2002.

The losses were caused by importers who underpaid their duty
and tax obligations during the goods clearance process. This is
possible as Indonesia uses the self-assessment tax system.

Under the system, importers may clear their goods after paying
import duty and taxes at an amount they calculate themselves.

Should the customs office discover, upon subsequent
investigation, that the amount was too low, it would demand that
importers pay the arrears. Usually, the customs office puts such
importers on a blacklist.

Analysts believe that the dishonest importers have colluded
with corrupt custom officials as none of the former have been
caught.

In an effort to curb the fraud, the customs office recently
launched a new policy obliging all importers to register
themselves at the customs office so that the agency would have
accurate data about them and be able to identify unscrupulous
importers.

Today, the customs office mostly relies on data provided by
the Ministry of Industry and Trade, which, many say, contains
many inaccuracies.

Elsewhere, Eddy said his office only felt responsible for
recovering the unpaid import duty, but not the unpaid luxury and
value-added taxes. This is despite the fact that his office was
assigned to collect the taxes from importers.

"Responsibility for recovering the unpaid taxes lies with the
directorate of tax," he said.

However, the director of inspection and collection at the
directorate general of taxation, Gunadi, disagreed with
Eddy.

"It is the customs office that has caused the losses and now
they want to throw the responsibility at us.

"They have better information than we do on dishonest
importers. If they fail to catch them, how can they expect us to
be able to do so?" Gunadi said.

Moreover, Gunadi added his office lacked the resources to
track down such importers.

Like Eddy, Gunadi was also pessimistic about the chances of
recovering the unpaid taxes, citing the lack of data about the
importers' whereabouts.

"I must regretfully say that the state will probably never
retrieve the unpaid taxes," he said.