RI rejects foreign investment?

RI rejects foreign investment?

We, PT Southwest Screens & Filters (PT SSF), are a foreign
investment subsidiary of Southwest Screens & Filters, S.A (SSF
SA) Belgium.

PT SSF has, as indicated in its financial statements from 1999
until 2002, experienced some losses. Therefore, every year PT SSF
has submitted a tax claim. Our yearly tax assessment since 1999
until 2001 did not satisfy us at all as a dutiful foreign
investment firm. And our disappointment climaxed at the auditing
of our 2001 tax assessment (SPT) as detailed below:

1. We reported our 2001 SPT in May 2002 (preceded by a
postponement demand).

2. On March 24, 2003, we received by facsimile an "order for a
tax audit" dated July 31, 2002 issued by the Taxation Audit and
Investigation Office of Special Jakarta One (KARIPKA).

On March 28, 2003, we sent data requested by KARIPAKA to our
tax consultant, which was forwarded on and received by KARIPKA on
April 7, 2003.

3. On May 26, we received by fax the audit result, and on May 28,
we returned to KARIPKA with supporting documents and details of
calculation that proved there were mistakes in the auditor's
calculations and perception. That day, they asked us to sign a
"dossier of audit results", which was without the investigator's
signature. We still have not signed it.

4. On June 2, we received the "tax assessment (SKP) of tax
announcement (SPT) 2001" that was, in fact, issued on May 28,
2003, the day we submitted our objection and proof.

It was really disappointing. How could a decision be made by
the Tax Office without giving us time to defend our position on
the audit result, which were obviously inaccurate? The
consequence is one SKP report that clearly indicates a careless
audit. The calculation of the "fiscal correction" resulted from
comparing the turnover we reported on the SPT with incoming
transfers as recorded on our bank statement (with the assumption
that all incoming transfers were from customers). But when we
rechecked the audit, we discovered miscalculations because of:

1. The double summarization of one of our current accounts by the
adding of monthly and daily bank statements.

2. In-house transfers were considered as incoming transfers from
customers.

Certainly we will not accept the audit result, and we will
soon submit an objection for processing. With such a bitter
experience, we will not continue to invest in Indonesia, and
instead remind future foreign investors to think deeper before
investing in Indonesia.

DOMINIQUE THURION, Managing Director, PT Southwest Screens & Filters,
Tangerang, Banten