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Indonesia to challenge tax avoidance among beef importers
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Meat market: Consumers buy beef at Pasar Minggu Market in South Jakarta. (JP/Viriya Paramita Singgih)
The government has launched a comprehensive investigation into tax avoidance committed by beef importers.
A deal signed on Thursday by Finance Minister Sri Mulyani Indrawati and Business Competition Supervisory Commission (KPPU) chairman Syarkawi Rauf will enable directorates general under the ministry to work together with the KPPU on joint investigations and the exchange of data.
The KPPU found 32 feed lotters and 12 poultry companies guilty of cartel practices last year.
The guilty parties were fined Rp 116 billion (US$8.68 million) and Rp 119.7 billion, respectively.
However, Sri Mulyani said the fines were too small compared to the profits, noting that the government found that most beef importers had allegedly avoided paying taxes because income tax from their sector always declined every year.
“Frozen beef importers who enjoyed threefold or tenfold increases in imports did not file their annual tax forms. We will also look into the value-added taxes they paid,” she said.
(Read also: Local breeders welcome court decision on cattle and meat imports)
The minister said the Trade Ministry would revoke their licenses if the importers were proven guilty.
According to the government’s data, the price of imported beef in Indonesia is around 30 to 40 percent higher than in neighboring countries.
