ICW accuses Soeharto's relative of tax evasion

ICW accuses Soeharto's relative of tax evasion

JAKARTA (JP): Indonesian Corruption Watch (ICW) alleged on
Friday that a company owned by a relative of former president
Soeharto was involved in a tax scam that caused the state at
least Rp 30.2 billion (US$4.02 million) in losses.

The Coordinator of ICW's working committee, Teten Masduki,
said PT Angkasa Bina Wisesa (ABW), which is owned by Soeharto's
brother in law Tubagus Sulaiman, manipulated its financial
reports to avoid paying tax during its four-year operation.

Tubagus is the husband of Soeharto's step sister, Martini Nita
Karyati.

"Public sources said the company started cheating on its taxes
at the start of its operations in mid-1994 and continued until
1997. But our investigation is based on the accurate financial
data of the 1996 and 1997 fiscal years," Teten told a media
briefing.

The company's executives were, however, not available for
comment.

ABW, established in 1993, works in the airline cargo and
warehouse sector. It ran Garuda's cargo warehouse facility at
Soekarno-Hatta International Airport from 1994 until last
September.

Garuda annulled its contract with ABW on Sept. 15, four months
after Soeharto stepped down, after indications of graft emerged.

Under the contract, ABW was given the authority to manage
Garuda's warehouses by paying the airline royalties in the form
of 14 percent of its gross income, which normally exceeded Rp 300
million a month, Teten said.

The warehouses were previously managed by Garuda, until ABW
took over the management using the airline's own equipment. ABW
later replaced Garuda's equipment with its own.

Garuda spokesman Pudjobroto said Garuda did not benefit from
the contract because it was able to manage its own cargo
warehouses and earned more than the mere 14 percent royalty from
ABW.

"Because of this, I think the contract with ABW was considered
to involve collusion, and thus it was canceled," Pudjo told The
Jakarta Post.

The corruption watchdog findings shows that ABW reported lower
revenues in its financial statement and higher expenditure to
reduce taxable income.

According to ICW's calculation, ABW owed Rp 10.07 billion in
unpaid taxes to the state in the last two fiscal years.

The unpaid taxes, coupled with a maximum 200 percent addition
in tax administration fines, should total about Rp 30 billion
owed to the state, excluding potential losses incurred in 1994
and 1995, he said.

Since the investigation into Soeharto's wealth began,
following his hasty resignation in May, Garuda has canceled eight
contracts with companies related to the former first family and
its cronies. (das)