Two firms to be tried for huge tax evasion
Two firms to be tried for huge tax evasion
JAKARTA (JP): Director General of Taxes Fuad Bawazier
yesterday submitted the dossiers of two tax evasion cases worth
Rp 2.17 billion (US$910,000) to the Attorney General's Office.
Fuad said the cases involved CV Graha Pasifik in East Java and
PT Supermix Wahana Tama in East Kalimantan.
Graha Pasifik is accused of issuing value added tax (VAT)
invoices on fictitious transactions, costing the government Rp
770 million in lost revenue in 1992.
"The company issued VAT invoices in the name of its clients
based on fictitious transactions. Then, the company applied for
refunds on the VAT inputs which were not actually paid," Fuad
told reporters after presenting the dossiers to Deputy Attorney
General for Special Crimes Yunan Sawidji.
According to the VAT law, a manufacturing company is entitled
to credit the 10 percent VAT that it pays for its inputs against
the VAT it collects from the goods it delivers to other parties.
If a manufacturer uses the goods as input to manufacture products
for export, it can ask for the VAT paid on the inputs to be
refunded.
Tax audits and investigations concluded that Graha Pasifik had
credited input VAT payments, which it had never made because the
VAT payments were based on fictitious transactions, Fuad said.
To conceal its fraud, Fuad said, Graha Pasifik had changed its
name four times: to Jala Sutraindo in 1993, Singosari Jaya in
1994, Delta Pasifik in 1995 and Surabaya Habeyam Center in 1996.
"The investigations uncovered Rp 770 million in falsely
claimed VAT tax refunds by Graha Pasifik only for the 1992 tax
year. We expect that further investigations by the Attorney
General's Office will reveal bigger sums of VAT payments being
manipulated by the company in subsequent years," Fuad said.
He added that Supermix Wahana Tama in 1995 misused the
facilities for value-added tax and income tax breaks granted to
some companies operating in eastern Indonesia.
Fuad would not elaborate on the latter case which involved Rp
1.4 billion in government losses, saying that "it is too
complicated".
"What is important here is that tax has become our main source
of funding to finance the government's spending. And we are
really serious in dealing with any tax evasion or manipulation,"
Fuad said.
The government expects to increase non-oil tax receipts by
15.59 percent to Rp 64.7 trillion next fiscal year, starting in
April, from Rp 55.98 trillion this fiscal year.
Tax receipts, by state budget definition, include revenue from
value-added taxes, income taxes, land and building taxes, import
duties, excise and export taxes.
Director of Tax Investigation Djazuli Sadhani disclosed that
his office had submitted 51 tax evasion cases worth more than Rp
150 billion to the Attorney General's Office last year.
The 51 cases included four taxpayers using different names.
District courts have handed down verdicts on the 51 cases. The
verdicts were all in the favor of the tax office. But the
defendants have appealed to higher courts.
Tax cases go to court whenever they involve crime, but those
not involving crime usually go to the tax settlement body in
Jakarta.
Fuad said the tax settlement body, the only body authorized to
settle tax disputes between the tax office and taxpayers, could
not settle disputes quickly because it had a large backlog of
cases.
"This body was established in 1927 by the Dutch colonial
administration. At that time, there were not as many tax
disputes. But now, 70 years later, such disputes have been
increasing sharply and the body has not enough manpower and
resources to settle them all," Fuad said.
The government and the House of Representatives are now
deliberating a bill on tax courts, which will take over the tasks
of the tax settlement body.
The tax courts, if the bill is passed, can be established in
other cities outside Jakarta. (rid)