Tax evaders get another six months behind bars

Urip Hudiono, The Jakarta Post, Jakarta

The Directorate General of Taxation is planning to extend the prison terms of two businessmen, one of whom is a foreigner, currently under detention for tax evasion as they have still not shown goodwill in paying their tax arrears.

"We will extend their detention for another six months," said director general Hadi Purnomo on Wednesday after opening a seminar on taxation at the State Accountancy Academy (STAN).

The two tax evaders, local businessman Jasman Lim and British executive Mark Michael Greenwood, are currently sharing a cell at the high-security Cipinang Penitentiary in East Jakarta.

Jasman was sent to prison last October for allegedly evading taxes amounting to Rp 11 billion (US$1.29 million). His six-month detention expires on April 27.

Greenwood, meanwhile, was detained last November for failing to pay Rp 45.8 billion in income tax arrears that have accumulated since 1998. He will end his term on May 10.

The directorate general had previously considered canceling Jasman's extension, as he had begun to pay off his tax arrears in installments.

Hadi further said that his office could only extend the detention for another six months, as permitted under the existing regulation.

Government Regulation No. 137/2000, which came into effect early in 2001, authorizes the directorate general to detain tax evaders without trial for a maximum period of one year, after which the office is to hand the case over to the police.

The regulation also requires the directorate general to first obtain approval from the Minister of Finance, before detaining anyone suspected of defaulting on government taxes such as income tax, land and property tax and value-added tax.

The directorate earlier announced a plan to detain another 41 tax evaders, including three foreigners, accused of refusing or failing to pay corporate and personnel taxes totaling Rp 287 billion as of March 17.

The 41 tax evaders have been prohibited from leaving the country, but the directorate has not yet sought approval from the Ministry of Finance for their detention.

"There are also 12 procedural steps we have to pass through before we ask for approval", Hadi said, without elaborating on the steps, or the identity of the foreign nationals.

"Besides, some of them have already started to give some assurance that they will pay their tax arrears," he continued, adding that his office would, however, still monitor the suspects until their taxes were due in May.