Tax evaders get another six months behind bars

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.