Economy may grow 8 pct with good tax revenue

Finance Minister: Agus Martowardojo

Finance Minister Agus Martowardojo said Indonesia's economy may grow by 8 percent if the government could boost tax revenue.

"[The economy] can expand by 8 percent if our tax revenue is good," said Agus in a hearing Monday with the House of Representatives' Commission XI on financial affairs.

"I have stated that [tax officials] must change [their behavior]. Continue what's good, leave what's not [good]. How to make our people prosper and reduce unemployment," he added.

Agus made the statement amid press reports revealing the mushrooming tax cases involving tax officials and wealthy businesses.

Agus said he was surprised to learn of the tax crimes committed by suppliers of palm oil company PT Permata Hijau Sawit (PHS). The court gave them only light sentences and the tax office continued to pay tax refunds to the company.

Agus revealed that the suppliers had underpaid their income tax obligation and then claimed tax refunds using fictitious transactions.

"We regret the income tax case, but then they stole state money through fictitious tax refunds," Agus said.

Fourteen PHS suppliers had stolen state money totaling Rp 190 billion (US$20.5 million) through fictitious transactions, tempointeraktif.com reported. Five of them had been convicted of stealing state money totaling Rp 156 billion.

"These suppliers were found guilty, but the sentence was so light, only six months in prison. They should have got heavier sentence because they had stolen state money," Agus said.

Despite the tax crime involving PHS, Agus revealed, the tax office still disbursed Rp 198 billion in 2008-2009 tax restitution to PHS.

Legislator Mayesa Johan warned Agus to be more careful in handling tax cases as his subordinates might have given him manipulated information on taxation cases.

Agus responded and said, "Pak, I need your trust. Let me manage this tax issue and if they commit crimes, I will punish them."