Rp 3b missing in brothel land case

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.