Tax office sends one tax evader to jail, warns others
Rendi A. Witular, The Jakarta Post, Jakarta
The Directorate General of Taxation has sent one tax evader to prison for failing to pay Rp 11 billion (US$1.32 million) in tax arrears, warning another 70 tax evaders they could face the same fate if they continued to withhold their tax payments.
Director General of Taxation Hadi Purnomo announced on Thursday that the Minister of Finance had issued a decree approving the detention of the recalcitrant taxpayer pending payment of his taxes to the state.
"We have detained the taxpayer. We are now waiting for him to pay Rp 11 billion to the state, or else he will spend the next six months and an extension of another six months in prison," Hadi said.
He refused to disclose the full identity of the tax evader, giving only his initials JL. He owns an import company, identified only as PT EI, located in Sawah Besar subdistrict in Central Jakarta.
Hadi said that JL had been sent to the notorious Salemba Penitentiary in Central Jakarta, but could file an objection with the administrative court while in detention.
He explained that in the case of JL winning an appeal against his detainment, the directorate would pay compensation of Rp 100,000 for each day that JL was detained and publish an announcement in a domestic newspaper to rehabilitate his name.
Meanwhile, the outgoing head of the tax collection division at the Directorate General of Taxation, Djangkung Sudjawardi, said there were 70 other tax evaders awaiting imprisonment.
He explained that two of the 70 tax evaders had owed taxes from last year and had almost been sent to prison along with JL. But at last minute the directorate gave them a grace period because they had submitted bank guarantees.
According to Djangkung, who is also a civil investigator at the directorate, the remaining 68 were more recent tax evaders and had been listed as so during the first nine months of this year.
"The tax directorate has issued distress warrants to and travel bans on the 68 new uncooperative taxpayers who owe the state around Rp 674 billion in combined tax arrears," he said.
He also said that as of the first nine months of this year, tax arrears increased by 38 percent to Rp 18 trillion from Rp 13 trillion in the same period of last year.
Government Regulation No. 137/2000, which came into effect early in 2001, permits the tax office to detain tax evaders. However, it was reluctant to carry out the mandate given the lack of support from other ministries.
To date, the tax office only would go as far as confiscating the assets of tax evaders or banning them from traveling overseas.
In April, the Ministry of Finance and Ministry of Justice and Human Rights inked an agreement allowing the tax directorate to detain uncooperative tax evaders in state prisons.
The move came amid the government's growing concern over the rising amount of tax arrears.
Elsewhere, Hadi said that between Jan. 1 and Oct. 15 this year, the directorate had collected 71 percent of its domestic tax revenue target for this year.
"We have collected Rp 149 trillion in tax revenue, excluding excise duties. We are optimistic that we will meet this year's target," he said.
The government has set the tax target for this year at Rp 236.9 trillion, including revenue from excise.