Police, tax office join forces to fight tax evaders

The police and the Finance Ministry’s tax office have vowed to crack down on tax evaders, with cooperation to combat tax crimes listed as a priority in a MoU to be signed by the two institutions.

“The MoU will encourage us to intensify our efforts to investigate tax-related crimes such as money laundering and tax fraud by using early investigation materials from the taxation agency,” chief detec-tive Comr. Gen. Ito Sumardi said Tuesday.

He said the police planned to restore a unit once used by tax officials to confiscate and withhold the properties of tax cheats.

“We are still deliberating some procedures so that we don’t accidentally confiscate property not related to the alleged crime,” he said on the sidelines of a police leaders’ meeting.

Director General of Taxation Muhammad Tjiptardjo, who also spoke at the meeting, said cooperation between the police and tax agency officials had so far been successful.

“We have managed to confiscate property belonging to tax swindlers thanks to the police who have supported us all along,” he said.

The tax agency has reportedly been conducting an investigation into ten large companies that have allegedly defaulted on their taxes.

Pertamina, Karaha Bodas Company, Industri Pulp Lestari, Kayumanis Plywood Industries were reportedly among the companies that had not paid their taxes.

Kaltim Prima Coal (KPC) and Bakrie Investindo, owned by Golkar Party chairman Aburizal Bakrie, were also on the list.

Two other companies belonging to Bakrie, PT Arutmin Indonesia and PT Bumi Resources, were alleged to have defaulted as well.

Tjiptardjo said he was convinced there was wrongdoing involved with the Bakrie companies’ taxes. He said he intended to file lawsuits against KPC and Bakrie Investindo.

“We intend to bring this case to court because it is proven that these companies were not completing their tax certificates with the right data,” he was quoted as saying by news portal detikfinance.com.

The directorate general of taxation has been studying the case after receiving reports late last year showing strong indications that these companies were probably evading their annual taxes, which apparently has become common practice in the country.

The tax issue has been used by ruling Democratic Party politicians and the Presidential Palace to attack politicians they believe have politicized the inquiry into the Bank Century bailout.

Analysts suggest the Democrats were targeting Golkar chairman Bakrie. Despite belonging to the Democratic Party’s ruling coalition, Golkar members have been among the most vocal in calling the Century bailout flawed and smacking of graft.

The case is believed to implicate Finance Minister Sri Mulyani Indrawati and Vice President Boediono.

Eryanto Nugroho of the Center for Legal and Policy Studies said the police and tax office needed to be serious in tackling tax evasion cases.

“We need people with integrity to go to great lengths to fight tax crimes. And it is also expected that both the police and tax agency officials are not tainted by any political issue while handling their duties,” he said.