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Jakarta Post

Asian Agri told to pay Rp 4.3t

  • Satria Sambijantoro

    The Jakarta Post

Jakarta   /   Fri, June 7, 2013   /  09:58 am
Asian Agri told to pay Rp 4.3t

Firm grasp: The Finance Ministry's tax director general, Fuad Rahmany (left), greets several chief editors of the nation's media groups at a meeting at the Taxation Office's headquarters in Jakarta on Thursday. (JP/Wendra Ajistyatama)


The government has urged Asian Agri, one of the country'€™s major plantation companies, to meet its obligation to pay funds totaling Rp 4.3 trillion (US$448 million) in back taxes and fines having been found guilty of tax evasion.

The director general of taxation, Fuad Rachmany, said the company would have to pay Rp 2.5 trillion of the total funds to the Attorney General'€™s Office (AGO) in fines and the remaining Rp 1.8 trillion to the tax office in the form of back taxes.

'€œIn total, they must pay Rp 4.3 trillion '€“ Rp 1.8 trillion to the tax office and Rp 2.5 trillion to the AGO,'€ Fuad said in a limited press briefing on Wednesday evening. He said that Asian Agri had been given 30 days to pay the back taxes to his office.

A business entity had to pay its tax obligation, as well as any fines, by 30 days at the latest from the day a notice of a tax underpayment assessment (SKP) was sent out by the tax office, Fuad said.

The tax office recently sent the SKP for the payment of the back taxes worth Rp 1.8 trillion to 14 business units belonging to Asian Agri. If the company did not respond to the SKP, then the assets of its business units could be seized '€œwithin weeks'€ following the 30-day deadline, he added.

'€œThis is going to be interesting. I think you should not expect them to pay; thus, we may have to use force [to make Asian Agri pay its fine],'€ Fuad told editors and media representatives at his Jakarta office.

The case surrounding Asian Agri is the biggest and most controversial tax evasion case in the nation'€™s history, involving as it does one of the major players in the oil palm plantation industry.

Asian Agri, which was founded in 1979, oversees 160,000 hectares of oil palm plantations across Sumatra, and owns 19 oil palm mills with a combined annual capacity in excess of 1 million tons. It is owned by tycoon Sukanto Tanoto, Indonesia'€™s fifth-richest person with a net worth of $2.8 billion, according to the 2013 Forbes list.

The company'€™s problems began in 2006, when the firm'€™s then controller, Vincentius Amin Santoso, was reported to the police for embezzling $3 million from Asian Agri. He then fled to Singapore, where he hit back at his former employer by making public allegations that Asian Agri was evading paying its taxes.

Vincent was subsequently sentenced to 11 years'€™ imprisonment for money laundering and his participation in the tax evasion scheme. He was paroled in January for helping prosecutors unravel the full extent of the tax evasion practices at Asian Agri.

In January, the Supreme Court ordered the company to pay Rp 2.5 trillion in fines, or 200 percent of its tax obligation, in what was the court'€™s historic first verdict in a tax evasion case. The fines have to be paid within 12 months of the verdict being announced.

Fuad took the time, however, to praise the government officials involved in the case. '€œIn this Asian Agri case, I am certain that my men, as well as prosecutors and the court'€™s judges, were offered billions [in gratuities], knowing the amount of fines facing the company.

'€œThis case shows that there are indeed people with integrity in my office. We must appreciate them and be fair; do not judge the tax office based only on one case in which one or two tax men end up in the spotlight for collusion,'€ the director general said.

Contacted separately, Asian Agri general manager Freddy Widjaja told The Jakarta Post on Thursday that he '€œhas yet to check the status'€ of the tax office'€™s demands and, thus, needed to verify the facts first before commenting on the issue.

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