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Indonesia loses billions in tax revenue from corruption: survey

03-14-2012 12:30 BJT

JAKARTA, March 14 (Xinhua) -- Results of a survey published recently found that Indonesia could lose half of its tax revenues from rampant corruption plaguing the tax-collecting agency, local media reported on Wednesday.

Jakarta-based think tank Perkumpulan Prakarsa said that for 2012, the potential losses in tax revenue could reach 521 trillion rupiah (about 55.9 billion U.S. dollars) or almost 50 percent of the total. The government expects to receive 1,033 trillion rupiah in tax revenues this year.

Perkumpulan Prakarsa executive director Setyo Budiantoro said on Tuesday the figures came from calculating the country's tax revenue capacity. According to a standard used by the International Monetary Fund (IMF), Indonesia is categorized as a middle-income state.

J. Prastowo, a researcher at the think tank, said that the loss in tax revenue could be caused by systemic practices of corruption, incompetent tax officials and inconsistencies in tax regulations.

"The Finance Ministry never takes these problems into account, and the least that the ministry's Directorate General on Taxation can do is to make predictions," he was quoted by the Jakarta Post as saying.

Prastowo also said it was easy for companies to evade tax responsibilities.

He said that most companies have three methods of tax evasion: failing to report their assets to tax offices, reporting the assets below their actual value and paying an amount under the actual tax owed.

He said that companies even went as far as bribing tax officials.

"Lately, offers often come from taxpayers rather from the tax officials," he said.

The survey also found a low compliance rate among Indonesian companies and local workers.

The Central Statistic Agency's (BPS) data shows that there are up to 12 million Indonesian firms, but only two millions have registered as taxpayers.

Of the 135 million middle-income workers, only 20 million workers registered themselves as taxpayers.

The think tank also found problems at the tax court, a special court to settle taxation disputes, where taxpayers took advantage of legal loopholes to evade taxes.

Editor:Wang Lingfei |Source: Xinhua

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