Sat, 25 Jan 2003

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.