TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Tax office jails more foreigners for tax evasion
The Finance Ministryâs directorate general of taxation has detained another South Korean national, identified only as KJY, 50, on Wednesday, after his company failed to pay tax worth Rp 2
Change Size
T
he Finance Ministry's directorate general of taxation has detained another South Korean national, identified only as KJY, 50, on Wednesday, after his company failed to pay tax worth Rp 2.36 billion (US$168,000).
KJY is the president director of PT SJG, a foreign direct-investment company producing ready-to-wear apparel based in Central Java, according to the tax directorate.
He is currently being detained in Salatiga, Central Java, over his role as the tax guarantor of his company.
The arrest is temporary and mainly aimed at forcing KJY's company to pay the due tax, according to the tax directorate.
KJY will be held for six months, but it may be extended to a whole year. He will be released immediately if the taxes are paid.
Spokesperson for the tax directorate Sanityas Jukti Prawatyani told The Jakarta Post on Thursday that KJY was the second South Korean to be detained by the directorate, and was among 22 tax guarantors who had been detained as of August.
'The first South Korean detained has already paid half of the total amount, but it is not yet sufficient for release,' she said.
The tax directorate sent a South Korean national in June to the Salemba Penitentiary in Central Jakarta after his firm failed to pay Rp 2.1 billion in tax.
'There will be more [arrests],' she said, but refused to disclose the schedule of planned arrests or the number of targets and their nationalities.
She went on to say that as long as the arrests were legal, her office would continue the operation.
Indonesia's tax regulations allow forceful measures, called gijzeling or hostage if literally translated from the Dutch, to collect tax payments. Seizure of tax payers or guarantors are legal if the tax amount is more than Rp 100 million and the debtors are showing no goodwill in paying the taxes.
Taking individuals hostage for tax debts is not new practice in the country as the legal grounds for it have existed since the 1960s and reinforced in the 2000s.
Aside from detention, the tax office has also cooperated with immigration to ban 479 institutional taxpayers and 89 individual taxpayers from flying overseas, the majority of whom are Indonesians while the rest are foreigners from other countries in Asia, Australia, Europe and the US.
Korean Chamber of Commerce and Industry in Indonesia (Kocham) president C. K. Song told the Post that his office was not aware of the recent arrest.
'They [Korean businesspeople] usually don't tell us if they have problems. Maybe they feel ashamed,' he said.
Song said that measures taken by the tax office were quite normal as other governments took similar measures. 'We don't feel pressured [by the tax office],' he said.
The South Korean Embassy was not available for comment.
Amid the slow rate of this year's tax collection due to the impact of the economic slump, the tax directorate has focused on ensuring taxpayer compliance to boost collection.
President Joko 'Jokowi' Widodo has demanded the tax directorate reach what economists have argued is an unrealistic target.
Putting aside global risks that have impacted economic growth, the tax directorate is required to collect Rp 1.29 quadrillion, in taxes a 30 percent increase on last year's total taxed amount.
As of the end of July, the directorate had only collected around 41 percent of the target, forcing many officials to admit that the target is unlikely to be reached. (prm)
