Tax office to jail three more foreign nationals

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Taxation is seeking to jail three foreigners without trial for tax evasion, after locking up a Briton last year for the same crime.

Djangkung Sudjawardi, an expert staff at the directorate, said on Thursday that the move followed a request from a provincial tax office.

"We are still making necessary preparations to detain the expatriates. We have yet to seek the approval of the Minister of Finance," said Djangkung, former head of tax collection at the directorate.

The tax directorate falls under the auspices of the Ministry of Finance.

Djangkung said the three foreign nationals were on a new list of 41 tax evaders accused of refusing or failing to pay corporate and personnel taxes totaling Rp 287 billion (US$33.7 million) as of March 17.

The foreign nationals have been barred from leaving the country.

Djangkung declined to reveal the identities of the three foreigners, fearing intervention by their respective embassies.

He hinted that the detention plan was proposed by the West Java tax office, which oversees Banten province and several cities in West Java, including Bogor, Cibinong and Depok.

The directorate plans to inform the embassies of the three foreigners once the finance minister approves the detention plan.

According to existing regulations, the Directorate General of Taxation is authorized to send tax evaders to jail without trial for a maximum period of one year, after which the directorate is to hand the case over to the police.

In the case of those defaulting on government taxes such as income tax, land and property tax and value-added tax, the tax office must first obtain the approval of the finance minister before detaining a suspect.

In the case of local taxes such as vehicle tax, restaurant tax and entertainment tax, local tax officials need only obtain approval from the relevant governor to detain a suspect.

Last November, the tax office sent British national Mark Greenwood to prison without trial for his alleged failure to pay Rp 45.8 billion in tax arrears. The case, involving a foreign national, was the first of its kind in the country.

According to the tax directorate, Greenwood had not paid income taxes since 1998.

In October, the directorate had sent Indonesian businessman Jasman Lim for failing to pay Rp 11 billion in taxes.

Greenwood and Jasman are both inmates at the notorious high- security Cipinang Penitentiary in East Jakarta.

Djangkung said the directorate was likely to extend Greenwood's detention for another six months, as he had not made any effort to pay off his tax arrears. Greenwood's first six months in detention expires on May 10.

As for Jasman, whose jail term ends on April 27, the directorate had yet to consider an extension, as he had begun paying off his tax arrears in installments.

International business lobby groups have criticized the directorate's move to detain foreigners without trial, arguing that it would further undermine the country's investment climate.