Tax fraud defendants may get 14 years in jail

JAKARTA (JP): Prosecutors yesterday demanded that four men indicted of tax evasion each be sentenced to 14 years imprisonment at a court here.

The prosecutors also demanded that each defendant compensate the state, with amounts ranging from Rp 10.5 billion to Rp 10.9 billion in addition to a Rp 30-million fine each.

The four are charged with masterminding and establishing companies to issue fictitious value-added tax invoices, sold for between 6 percent to 30 percent of their face value between March 1995 and June 1995.

Suspect Hartono, 46, and Raden Ignatius Suarisman, 57, are being tried by a team of judges led by I.G.K. Sukarata while suspect Baharuddin Umar, 46, and Tonny Effendy, 31, are being tried by team of judges led by Sartono.

Prosecutor M. Djaenuddin Nare are charging that Hartono and Suarisman have cost the state a loss of some Rp 46 billion in tax revenues.

This is lower than Rp 58.3 billion originally mention in an earlier indictment based on 12,500 bogus VAT invoices allegedly issued by 31 firms established by the four suspects.

However, Djaenuddin said only 26 companies were proven to have been involved in selling VAT invoices.

In a separate hearing, prosecutor R. Moekiat charged that suspect Tonny and Baharuddin caused the state a loss of some Rp 44 billion in tax revenues.

Approximately 142 witnesses have been heard in 23 court hearings, which started in March.

Entrepreneurs are obliged to collect 10 percent in value-added tax when consumers make purchases. The difference between incoming and outgoing taxes collected by entrepreneurs is the amount deposited with the state as value-added taxes.

Entrepreneurs exporting goods are entitled to claim back the amount of tax deposited with the state when the goods are exported.

Previous hearings revealed that companies established by the four suspects fulfilled most of the legal procedures and are actually allowed to issue tax invoices.

The invoices became invalid because no real sales occurred.

Prosecutors also demanded that the suspects' property allegedly gained from the scheme be confiscated, including vehicles and houses.

Prosecutors took turns reading the 339 pages and 459 pages of charges at the Central Jakarta district which lasted two-and-a half and four-and-a-half hours respectively.

Defense statements of suspect Baharuddin and Tonny will be heard next Tuesday while Hartono and Raden's will be on June 25. (14)