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.