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Jakarta Post

Asian Agri continues fight for lower tax obligation

  • Mustaqim Adamrah

    The Jakarta Post

Jakarta   /   Fri, December 13, 2013   /  08:44 am

The Finance Ministry'€™s tax office has said Asian Agri, a company found guilty of tax evasion in 2012, had not fully complied with the Supreme Court ruling as it was still fighting for a lower tax obligation.

The company is now appealing to the Tax Court in the hope its tax obligation be lower than Rp 1.9 trillion (US$157.7 million) as documented by the tax office.

Earlier, Asian Agri complained about the amount of the tax to the tax office, but the latter played down its move.

Undeterred, the company then filed a complaint with the Tax Court.

'€œWe played down their objections on Oct. 31. Now, they are filing an appeal with the Tax Court. We are awaiting developments,'€ said Fuad Rachmany, the ministry'€™s director general for taxation, on Wednesday evening.

According to Fuad, Asian Agri had paid Rp 950 billion in back taxes before filing the appeal with the Tax Court. The 2002 Tax Court Law stipulates an appeal can only be made after 50 percent of back taxes have been paid.

The case surrounding Asian Agri is the biggest and most controversial tax evasion case in the nation'€™s history, involving 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 tenth-richest person with a net worth of $2.3 billion, according to Forbes 2013 list of Indonesia'€™s 50 richest people.

The company'€™s problems began in 2006, when the firm'€™s then comptroller, 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.

According to a Supreme Court ruling issued on Dec. 18, 2012, the company also has 12 months since the announcement of the verdict, or by next Wednesday, to pay Rp 2.5 trillion in fines, or 200 percent of its tax obligation, or its assets will be confiscated.

The court also found former Asian Agri tax manager Suwir Laut guilty of providing false data on the tax obligations of the 14 companies during the 2002-2005 period.

Asian Agri general manager Freddy Widjaja confirmed the company'€™s appeal attempt.

'€œObjections filed with and rejection of the directorate general for taxation, and an appeal filed with the Tax Court, show how the case is about administrative affairs,'€ he told The Jakarta Post in a text message.

Setia Untung Arimuladi, a spokesman of the Attorney General'€™s Office (AGO), refused to comment on the progress of the case.

The AGO is responsible for asset confiscation if Asian Agri fails to pay its fines.