TAX NEWS - June 2010

Indonesia Tax: Ministry approves tax probe of 4 firms

The Finance Ministry of Indonesia gave the National Police approval to examine the tax returns of four companies allegedly involved in bribery cases connected to Gayus Tambunan.

"I have approved the request from the [Finance Ministry's] secretary-general and the director general of taxation to open tax cases," Finance Minister Agus Martowardojo said Monday.

Tax returns are confidential and can only be examined by the tax office after the finance minister approves.

Forty-four companies have been implicated in taxation corruption cases involving Gayus.

National Police chief detective Comr. Gen. Ito Sumardi said police have only started probing PT SAT, a shrimp-processing company in Sidoarjo, East Java; PT DAS, an oil drilling equipment rental company in Jakarta, PT EP, a national cellular phone operator; and PT ITP, a cement producer in Citeurup, West Java.

"It's difficult to thoroughly investigate all of the companies at the same time," Ito said.

The police had difficulties accessing the tax documents, he said.

"We are currently given only copies, while the original documents are important for the investigation. We must have approval from the finance minister to obtain the documents," he said.

The four companies now under investigation are not thought to be key players in the taxation corruption case and were not previously implicated by Gayus.

Gayus said that he received many bribes from mining companies affiliated with the family of Golkar Party chairman Aburizal Bakrie, such as PT Bumi Resources, PT Kaltim Prima Coal and PT Arutmin.

The former tax official admitted that he received US$500,000 from KPC, $500,000 from Bumi and $2 million in bribes from given by KPC and Arutmin in tandem.

KPC gave a $3 million bribe to settle a currency-misinterpretation dispute with the Jakarta tax office in 2008, said sources close to the police.

Half of the bribes were given to a person identified as MPM, Gayus' superior at the tax office.

Aburizal, the chief patron of the Bakrie family and head of President Susilo Bambang Yudhoyono's joint administration of coalition parties, said he was not involved in the graft case.

The three companies were publicly-listed and independent, he said.

"I'm only one of the shareholders. The companies belong to the public."

Dossiers for Gayus, police detectives Comr. Arafat Enanie and Adj. Comr. Sri Sumartini, lawyers Haposan Hutagalung and Lambertus Palang Ama, businessman Andi Kosasih, and case broker Sjahril Djohan are complete and will be forwarded to the court, said National Police spokesman Insp. Gen. Edward Aritonang on Monday.

However, the AGO's investigationof tax broker Alif Kuncoro, judge Muhtadi Asnun and prosecutors Cirus Sinaga and Poltak Manulang are not yet complete, he added.