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)