Rp 3b missing in brothel land case

The Jakarta Post, Jakarta

The City Council has found that the city has lost some Rp 3 billion (US$300,000) in income tax that should have been paid by the owners of the former Kramat Tunggak brothel complex in North Jakarta when they received compensation for their land acquired for the development of an Islamic center last year.

The allegation that the city officials had yet to hand over the taxes to the city coffers, after they had disbursed some Rp 83 billion as compensation to the land owners, who are also the pimps from the former brothel, was revealed in a council meeting at city-owned resort Wisma Jaya Raya in the Puncak, Bogor, West Java, on Thursday.

"The officials should have cut the income tax from the money before it was disbursed to the pimps," councillor Sjamsidar Siregar of the National Mandate Party said on Thursday.

But Sjamsidar, who is a member of Council Commission C for budgetary affairs, said the council would give a chance to the administration to explain itself before deciding its final stance.

Beside the tax issue, the State Audit Body (BPK) earlier released its report stating that the land price had been marked up by about 45 percent.

It stated that due to the mark-up, the administration suffered Rp 26.5 billion in losses in the acquisition of the 10.4 hectares of land and buildings of the brothel complex, which was closed in 1999.

BPK said most of the plots, which, according to the regulations, should have been priced at 60 percent of the sale value of taxed property (NJOP), were bought at the price of 90 percent of their NJOP.

City Governor Sutiyoso has admitted "an administrative weakness" in the acquisition, saying that the land, which had been sold to pimps in previous years, was still registered as a city asset.

Several officials from the North Jakarta Mayoralty, including its mayor Soebagjo, have been questioned by the Jakarta Prosecutor's Office over corruption allegations in the land deal.