Business

Three coal giants to face tax office’s music

Andi Haswidi, The Jakarta Post, Jakarta | Mon, 12/14/2009 10:22 AM
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Three coal companies from the Bakrie Group have found themselves entangled in controversy, following the tax office’s revelation it is investigating possible tax evasion worth Rp 2.1 trillion (about US$214 million) by the three.

But the three companies — PT Kaltim Prima Coal (KPC), PT Arutmin Indonesia and their parent company, PT Bumi Resources — remain confident over their tax status, with a spokesman for Bumi saying the case was down to a difference in tax calculation.

The revelation is “in fact, a great opportunity to clarify long-standing differences between ourselves and the tax authority over our tax status,” Bumi corporate secretary Dileep Srivastava said Sunday in a text message, adding that the companies have always been proactive in communicating with the office over their tax status.

Dileep was responding to the tax office’s announcement last Friday that the office was carrying
out an investigation, officially started in March, into possible irregularities in relation to the companies’ tax obligations in 2007.

Mochamad Tjiptardjo, the tax office chief, said the office alleged there were unreported revenues on their 2007’s tax forms, which “violate existing regulations”.

Of the total tax payment shortfalls, the tax office revealed that KPC owed the biggest at Rp 1.5 trillion, followed by Bumi with Rp 376 billion and Arutmin with Rp 300 billion.

KPC and Arutmin actually paid Rp 800 billion and Rp 250 billion respectively, to help cover the shortfalls in November, but Tjiptardjo said this did not eliminate the crime as the case had already entered the investigation phase, adding that the authority to stop the investigation rested with the Attorney General’s Office.

“And that can only be done after a company settles all its debts, plus pays a penalty of five times the amount it owes,” Tjiptardjo said.

On Sunday however, Dileep said the companies were confident and looked forward to making the necessary clarifications on the issue to the tax office.

He indicated that the difference in tax obligation calculations might have been triggered by
the fact that “with our coal asset status as first-generation coal-mining contractors, we are privileged with different rights.”

He did not elaborate.

Tjiptardjo rejected speculation that the tax office’s move was in some ways related to the well-publicized confrontation between Finance Minister Sri Mulyani and former chief welfare minister who now chairs the Golkar Party Aburizal Bakrie regarding the much-debated Bank Century bailout case.

While the Bakrie Group is controlled by the powerful Bakrie family, the tax office comes
under the auspices of the Finance Ministry.

“We are professional and are not involved in politics. Moreover, we investigated this case long before [the public confrontation] surfaced. There has never been an order from the minister on this case,” Tjiptardjo added.

In an interview with The Wall Street Journal last Thursday, Mulyani believed the Bank Century bailout issue currently being probed by the House of Representatives’ inquiry committee was in part an attempt to discredit her reform agenda by certain politicians, notably leaders of the Golkar Party, including Aburizal.  

“Aburizal Bakrie is not happy with me, I’m not expecting anyone in Golkar to be fair or kind to me [during the inquiry],” Mulyani was quoted as saying.

The House committee is chaired by one of Aburizal’s closest aides, Idrus Marham, who in return
has said that Aburizal never ordered Golkar’s lawmakers to carry out a personal vendetta against Mulyani.

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