Tax arrears rise to Rp 26 trillion, official says
Tax arrears rise to Rp 26 trillion, official says
The Jakarta Post, Jakarta
The tax office said on Friday that unpaid taxes rose to Rp 26
trillion (US$3.09 billion) last month or equal to the size of the
government subsidy for fuel and non-fuel products in the current
state budget.
Djangkung Sudjawardi, a senior tax official, was quoted by
detik.com as saying on Friday that the above figure included Rp
10 trillion carried over from last year.
He said that last year's tax arrears were actually Rp 17.1
trillion but some tax payers managed to settle their payment
after the tax office threatened to impose a travel ban against
them or send them to prison without trial.
He said that last month, a travel ban was slapped on around
eight tax evaders, but two of them immediately settled their tax
obligations.
The huge amount of tax arrears in the country has been a major
headache for the tax office, which has been under pressure to
collect as much tax as possible as it now plays a greater role in
funding the state budget especially amid strong political
pressure to stop foreign borrowing, which has been mainly
corrupted in the past.
According to data from the tax office, tax arrears have been
on the rise in the past three years, amounting to Rp 13.3
trillion, Rp 17.3 trillion and Rp 17.1 trillion in 2001, 2002 and
2003, respectively.
The government has launched various measures to resolve the
problem including empowering the tax office to temporarily detain
recalcitrant tax payers without trial.
In October last year, one local businessman and one expatriate
were detained by the tax office over alleged tax evasion.
Government Regulation No. 137/2000, which came into effect
early in 2001, permits the office to detain tax evaders. However,
in the beginning it was reluctant to carry out its mandate given
the lack of support from other ministries.
The tax office would only go as far as confiscating the assets
of tax evaders or banning them from traveling overseas.
But the office, under pressure to collect higher tax revenue
to help finance the state budget, is clamping down on tax
evaders. It recently warned another 70 tax evaders that they
could go to prison if they did not pay their taxes.
The shock therapy launched by the government, however, has
been criticized by some businessmen who said that detention was
unfair as corrupt tax officials had been largely unpunished.
They also said that sending people to jail without trial would
only do further harm to the country's investment climate.
Tax arrears rise to Rp 26 trillion, official says