VAT refund process to be accelerated

VAT refund process to be accelerated

JAKARTA (JP): The Director General of Taxes Fuad Bawazier promised yesterday that his office will accelerate the processing of value added tax (VAT) refunds for export-oriented companies in a bid to help boost the country's exports.

"We have actually quickened the distribution of VAT refunds. You can see that from the number of refunds we disbursed in the last two months," Fuad told journalists after attending a hearing with the Banking and Financial Commission of the House of Representatives.

He told the commission that his office disbursed Rp 346 billion (US$148 million) for VAT refunds last month, up from Rp 282 billion in January.

"With such speedy VAT refunds, exporters can use their money for new investments to finance yet more exports," Fuad said.

Exporters are exempted from duties and VAT on materials imported for the production of export goods. Because they are required to pay duties and VAT on materials upon their arrival -- if they are not processed in a bonded zone -- they are entitled to a refund on the duties and VAT which have been paid.

While the tax office is responsible for the VAT refunds, the Directorate General of Customs and Excise is responsible for the duties refunds.

Speaking about the government's duty and indirect tax facilities, legislator Djatmikanto of the Armed Forces faction said some of the facilities often fail to perform as expected.

He contended that many domestic manufacturers prefer to import their raw materials because of their inability to claim refunds of VAT on inputs purchased domestically from suppliers.

Many exporters have also complained about the slow processing of VAT and duty refunds. Some textile exporters, for instance, said that they got their refunds a year after they submitted their claims.

"It is true that VAT refunds were often very late. It was just because we often encountered fictitious tax invoices. Therefore, we were really very careful in processing claims for tax refunds," Fuad contended.

He promised that his office will give quicker services to those who fill in VAT refund invoices correctly.

"And for those who cheat in filling in such invoices, we propose that they be given the heaviest possible penalties. If necessary, the authorities can send them to Nusakambangan island," Fuad said, referring to a correctional center south of Cilacap, Central Java.

Fuad disclosed that his office is currently processing 20 "naughty" companies, suspected of manipulating tax invoices. However, he declined to mention them, saying that most of them are located in the Greater Jakarta area.

He said the government had revoked the licenses of 51 enterprises convicted of committing tax evasion through tax invoice manipulations.

Four companies are currently on trial in Jakarta and Surabaya, East Java, for tax evasion. Two firms being tried in Jakarta are suspected of causing loses of Rp 58 billion to the government.

"Such efforts of bringing tax evaders to court show the government's commitment to enforcing tax laws," Fuad said. (rid)