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Jakarta Post

Asian Agri attempts to deflect accusations through joint study

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Thu, February 20, 2014   /  08:11 am

Research conducted jointly by the Indonesia Research Strategic Analysis (IRSA) and Asian Agri claims to have found '€œirregularities'€ in the tax evasion charges against the company.

IRSA advisory board chief Faisal Basri said on Wednesday that the taxation directorate general irrationally accused Asian Agri of evading Rp 1.3 trillion (US$110.4 million) in taxes between 2002 and 2005.

'€œHow is Asian Agri supposed to pay more taxes than the profits it takes in? That does not make sense,'€ he said in a press briefing.

According to the research findings, which quoted Asian Agri'€™s financial report, the company booked Rp 7.6 trillion in total sales for the 2002-2005 period with a profit margin of 16.7 percent, which translated to Rp 1.27 trillion in net profits.

But if the company had failed to pay Rp 1.3 trillion in taxes with a tax rate of 30 percent '€” as alleged by the tax office '€” the company should have made Rp.4.3 trillion in profits during the period, Faisal said.

Thus, the Rp 4.3 trillion in profits accounted for 57 percent of total sales during the period.

'€œA 57 percent profit margin is difficult to achieve, let alone for four years in a row,'€ said Faisal.

'€œI have explained my findings to the [Finance Ministry'€™s] director general for taxation [Fuad Rachmany], and I also used this research when I was summoned as a witness for Asian Agri in court.'€

When asked how much tax Asian Agri should actually have paid, the company'€™s general manager, Freddy Wijaya, said, '€œLook, our profits in the 2002-2005 period were Rp 1.24 trillion, but we were taxed Rp 1.3 trillion. How come the tax was higher than our profits?'€

Being one of the major players in the palm oil industry, Asian Agri'€™s tax evasion case is the biggest and most controversial in the nation'€™s history.

Asian Agri was founded by tycoon Sukanto Tanoto in 1979. It 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.

Asian Agri'€™s problems began in 2006, when Vincentius Amin Santoso, then the firm'€™s controller, was reported to the police for embezzling $3 million from the company.

Vincent, who then fled to Singapore, tattled on his former employer, accusing Asian Agri of evading taxes.

In January 2013, the Supreme Court ordered Asian Agri to pay Rp 2.5 trillion in fines, or 200 percent of its tax obligation.

Until January this year, the company had paid up to Rp 720 billion and would settle the remainder with installments of Rp 200 billion each month until October through the Attorney General'€™s Office'€™s account at state lender Bank Mandiri. (dwa)

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