ICW reveals alleged tax embezzlement
JAKARTA (JP): The Indonesian Corruption Watch (ICW) revealed on Thursday an alleged multimillion dollar tax embezzlement operation disguised under a bank's deposit scheme that has occurred in the past five years.
The private commercial bank, identified as PT PIB, invites customers to invest their money in a U.S. dollar deposit scheme where its interest will not be taxed.
According to ICW, the bank claimed that it marketed such a scheme to Indonesian customers for its sister company PBII in the Republic of Nauru.
"But the two banks, although belonging to the same group, are not structurally attached. PIB claimed that the fixed deposits went to PBII, but actually the money was kept by the bank itself," Irfan Muktiono of ICW told a media conference.
"This is an illegal way to amass funds as it violates banking and tax regulations," he said.
He further disclosed that, according to the bank's January and February 2000 data, there were 98 fixed deposits attached to the scheme totaling US$10.6 million in one of its Jakarta chapters.
PIB itself has 102 chapters in the country.
ICW calculated that in two months only, the publicly listed bank should submit some $9.6 million to the state from its deposits interest as stipulated in Law No. 10/1994 on income tax and letters of instruction from Bank Indonesia.
The law authorized the government to impose an average of 10 percent tax on the interest of deposits.
Irfan suspected that there was corruption practices in the scheme, which had lured 170 big-name customers. He called upon the government to check how they could have obtained such a large amount of money deposited in the bank.
The corruption watchdog also assumed that such a practice was rather like money laundering, which was also often found in similar schemes both in state and private banks.
ICW chairman Teten Masduki said the result of the investigation was submitted to the directorate-general of tax early this month but he admitted there were difficulties in investigating the case due to regulations on bank secrecy.
Teten explained that Presidential Decree No. 68/1983 forbids the tax office to probe the identity of depositors in local banks for taxation purposes. He sensed a conspiracy in the embezzlement of the deposits' taxes which involved the tax office and the central bank.
"It probably would implicate the bank accounting company, whose initials are HTM," Teten said.
"It's time for the directorate-general to check on whether the big tax payers have paid their obligations, and not only go after the small fish, to reach its goal to collect Rp 179 trillion in taxes to support the state's 2001 budget," he added.
On a separate occasion, director general of tax Hadi Purnomo told Antara that his office had established a special four-member team to further investigate the report from ICW.
However, he said, they had to ask for Bank Indonesia's approval to summons the suspected banks.(bby)