Tax office threatens to publish names of tax evaders

Tax office threatens to publish names of tax evaders

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Taxation threatens to go public with
the names of the country's largest corporate tax evaders in
September if they continue to be uncooperative in settling their
tax obligations.

Director of the Large Taxpayers Office (LTO) Sjarifuddin Alsah
told The Jakarta Post on Tuesday that the planned measure was
part of the LTO's attempt to reduce tax arrears by large
businesses.

"We shall disclose the name of the delinquent taxpayers after
reviewing their tax arrears," said Sjarifuddin.

The newly established LTO is responsible for collecting taxes
from the country's top 200 businesses, which are expected to
contribute around 23 percent of the current tax revenue target of
around Rp 185 trillion.

The tax office previously said that 30 of these big businesses
had been considered as delinquent taxpayers, whose combined tax
arrears in 2000 reached Rp 8.4 trillion, or about 60 percent of
the total tax arrears of Rp 14.5 trillion for that year.

One function of the LTO, as agreed with the International
Monetary Fund (IMF), was to take bold measures to reduce tax
arrears by 25 percent this year.

Sjarifuddin also warned delinquent taxpayers that the office
would take other drastic measures, including confiscation of
assets and prosecution, should they persist in avoiding their tax
payments.

The government is under pressure to collect higher tax
revenues to help finance the state budget, which is heavily
burdened by the cost of the late 1990s bank bailout program.

But the plans to publish the names of delinquent taxpayers may
meet strong opposition from powerful tycoons. It is also not
clear how the plan would fit in with the existing taxpayer
secrecy code.

Meanwhile, the Directorate General of Taxation has instructed
all tax offices in the country to inform taxpayers, particularly
wealthy ones, that they will be given one month to review their
self-assessment tax report.

Starting from September, the tax office will check the report
and if it finds indications that taxpayers have cheated on their
tax payments, legal proceedings will be started.

Taxpayers will have only a limited opportunity for cheating in
their tax report because the Directorate General of Taxation is
now supported by a comprehensive and accurate database on wealthy
taxpayers.

The information, termed the "Data Bank", was compiled from
various sources such as state electricity company PLN, the
Jakarta and Surabaya stock exchanges, the Indonesian Bank
Restructuring Agency, the Stock Market Supervisory Agency, the
State Land Agency and provincial authorities.