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No link between tax evasion and royalty payments: Tax office
The tax office said that alleged tax evasion amounting to Rp 2
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he tax office said that alleged tax evasion amounting to Rp 2.1 trillion (US$222.6 million) by three coal companies affiliated with the Bakrie group is not related to the issue of possibly overdue royalty payments.
“This is about tax issues only,” tax chief M. Tjiptardjo told reporters Wednesday, in response to the statement sent Sunday by PT Bumi Resources Tbk. that the issue is “related to our entitled privileges as a first generation mining contractor”.
These privileges include special provisions on taxes and royalties.
Bumi is the parent company of PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, all tied to the family of Aburizal Bakrie, chairman of the Golkar Party.
KPC and Arutmin are among the six companies that owe the government coal royalty payments of $598 million and Rp 1.6 trillion in total. But the Development Finance Comptroller (BPKP) discovered their liabilities are equal to the refunds of value added tax that the government owes them.
It is unclear whether the six companies and the government have settled their outstanding payments.
Last week, Tjiptardjo said Bumi, KPC and Arutmin did not report some revenues in their 2007 tax forms, suggesting possible evasion.
“The technique varies, but the point is [they] did not report their actual sales. That is the modus [operandi],” he said.
The tax office recorded that KPC owed the biggest tax shortfall of Rp 1.5 trillion, while Bumi owed
Rp 376 billion and Arutmin Rp 300 billion.
KPC and Arutmin have paid Rp 800 billion and Rp 250 billion respectively to help cover the shortfall in November, but Tjiptardjo said as the case has entered the investigation phase, the authority to stop the investigation now rests with the Attorney General’s Office (AGO).
“If they want to pay the tax shortfall penalty, the case won’t have to be processed in court. Based on article 44 [of tax law] they can submit a request to the Finance Ministry, and the Finance Ministry to the AGO, to stop the investigation but they are required to pay a penalty of 400 percent of the shortfall,” he said.
Tjiptardjo also refuted an allegation that the tax investigation was part of a black campaign against the Bakrie family following an open conflict between Finance Sri Mulyani Indrawati and the head of the family, Aburizal, who is also the chairman of the Golkar Party.
The conflict between Mulyani and Aburizal heightened when the former claimed to the media that the inquiry by the House of Representatives into the government’s handling of Rp 6.76 trillion Bank Century bailout last year was being used in an attempt by rival politicians to unseat her because of her efforts to overhaul the country’s bureaucracy.
Mulyani said that she would not get fair treatment from anyone in Golkar, one of whose members is chairman of the inquiry team, because Aburizal, “is not happy with me.”
Dileep Srivastava, Bumi’s senior vice president for investor relations, was not available for comment.
He said in the statement earlier Bumi is “awaiting further explanation while studying the facts in
hand in order to be in line with the authority’s understanding on the matter”.
“Hopefully, we can share more information with the investing public after this matter is clarified with our taxation authorities through constructive engagement,” he said.
