Shoveled: Garuda Boss Fired for Smuggling Harley Davidson Bike and Brompton Bicycles

Jakarta Globe, NUR YASMIN, December 5, 2019

The disassembled parts of a smuggled Harley Davidson Shovelhead are shown 

by customs officials in Jakarta on Thursday. (B1 TV Photo)

Jakarta. Flag carrier Garuda Indonesia's president director I Gusti Ngurah Ashkara is soon to be fired for allegedly smuggling a Harley Davidson motorcycle and two Brompton bicycles, State-Owned Enterprises Minister Erick Thohir said on Thursday.

The items were smuggled inside Garuda's brand new Airbus A330-900 Neo being delivered from its factory in Toulouse, France, in mid-November.

There were 22 passengers on the plane and four of them were Garuda directors: the president director, better known as Ari Ashkara, technical and services director Iwan Joeniarto, cargo and business development director Mohammas Iqbal and human resources director Heri Akhyar.

"As the SOE Minister, I will dismiss the Garuda president director. We will not stop there; we will look for other people who might have been involved in this case as well," Erick told a press conference in Jakarta.

The used Harley Davidson motorcycle had been disassembled prior to delivery and smuggled as parts. Customs officials found them wrapped in 15 boxes inside the plane's cargo area.

The Brompton bikes and accessories were found in three other boxes.

Erick said an audit by the customs office showed the smuggled items belonged to the president director, despite the baggage claim tags carrying different names.

Ari had instructed his subordinates to find him a classic Harley Davidson Shovelhead from the 1970s.

The used motorcycle was purchased in April 2019 with the help of a Garuda finance manager in Amsterdam.

"It's really sad that this [personal] transaction had to drag down an SOE," Erick said.

The Coordinating Minister for Maritime Affairs and Investment Luhur Binsar Pandjaitan said during a visit to Tongxiang, China, on Thursday that he fully supported Erick's decision.

"[An act like] this will hurt our investment climate," he said.

Finance Minister Sri Mulyani Indrawati meanwhile said smuggling the Harley and the Bromptons had cost the country up to Rp 1.5 billion ($107,000) in unpaid taxes.

"The Harley bike is valued at Rp 800 million and the Brompton bicycles cost Rp 50-60 million each," Sri Mulyani said.

"Everyone should always obey existing regulations," she told reporters.

Finances of Opposition Leader Prabowo and Other Public Figures Exposed in Paradise Papers

Jakarta Globe, Tabita Diela,November 06, 2017

Tommy Suharto, right, hands over his tax report to Ken Dwijugiasteadi, director
general for taxation at the Ministry of Finance, in September 2016. (SP Photo/
Joanito De Saojoao)

Jakarta. Three well-known public figures, including children of the late President Suharto and opposition party leader Prabowo Subianto appear in the Paradise Papers, a global investigation released by the International Consortium of Investigative Journalists, or ICIJ, on Sunday (05/11).

The Paradise Papers put a spotlight on the trillions of dollars moved through offshore tax havens by politicians, business owners, millionaires and powerful people across the globe.

The report exposed 13.4 million leaked documents — obtained by the German newspaper Süddeutsche Zeitung and shared with the ICIJ — including loan agreements, financial statements, emails, trust deeds and other paperwork from over nearly 50 years from offshore law firm Appleby, Singaporean company Asiaciti Trust and official business registries in Bermuda, Cayman Islands, Lebanon, Malta, Trinidad and Tobago.

ICIJ highlighted the name of retired general and leader of the Great Indonesia Movement Party (Gerindra) Prabowo Subianto, as well as two children of the late President Suharto, Hutomo Mandala Putra — also known as Tommy Suharto, head of Humpuss Group — and Siti Hutami Endang Adiningsih for having registered companies in tax havens overseas.

The ICIJ, however, posted a disclaimer on its site, saying that the organization did not intend to suggest or imply that any people or companies included in the ICIJ Offshore Leaks Database have broken the law or acted improperly.

The Jakarta Globe has not independently examined the documents.

"We started [combing through the data] from the beginning of this year. [There are only] 200 Indonesian names and 15 companies," Wahyu Dhyatmika, an editor for Tempo Media Group and an investigative reporter, told the Globe.

Indonesia's Tempo is one of 95 media partners that explored 13.4 million leaked files. According to Wahyu, Tempo paper and magazine will release other names one by one this week.

Wahyu said the Paradise Papers and their predecessor, the Panama Papers, come from different databases, though multiple names appear on both lists.

Naming Names

Wahyu said journalists involved in the report support a fairer tax policy for all.

"Instruments that allow countries to track the wealth of their residents must be prepared," Wahyu said.

Hestu Yoga Saksama, the tax office's spokesperson, said the government will "follow-up with the latest data and information from various sources" including the Paradise Papers, but has refused to comment on Tommy's or Prabowo's companies.

"We can't name a taxpayer specifically to the public," Hestu said, referring to secrecy rules in a 2009 law about general provisions and tax procedures and a 2016 law about tax amnesty.

Hestu, however, noted that the Automatic Exchange of Information (AEOI) — which will begin operations in September 2018 for Indonesia — will provide more detailed, wider and verified data compared to the independent report obtained by journalists.

Tommy joined Indonesia's tax amnesty program last year. During a press photo opportunity in Jakarta in September 2016, he said his family should "make the best use of the initiative" by joining the program.

No Mercy for Shady Tax Consultants: Finance Minister

Jakarta Globe, December 29, 2016

Finance Minister Sri Mulyani Indrawati and the director general of taxation, Ken
 Dwijugiasteadi, in conversation during the minister's impromptu visit to the
tax office in Jakarta on Wednesday (28/12). (JG Photo/Tabita)

Jakarta. Finance Minister Sri Mulyani Indrawati said she will clamp down on tax consultants involved in tax evasion, as they are currently inundated by clients seeking their assistance to join the government's tax amnesty program.

"I've asked Mr. Ken [Dwijugiasteadi, the director general of taxes] to check out the tax identification numbers a many consultants," she told reporters on Wednesday (28/12).

"The consultants are cashing in big from the tax amnesty program. I've seen one who reported up to 30 asset declaration letters," she said.

Sri Mulyani made the comment during an impromptu visit to the headquarters of the Directorate General of Taxation in Jakarta, where she found employees from several tax consultancies submitting their clients' wealth reports.

"It's common practice in industrial countries; even individual taxpayers there use the services of tax consultants," she said. "But please don't try to lower [the value of taxpayers' assets] so they can receive the 0.5 percent tariff."

The government offers a 3 percent tariff for taxpayers who come clean on previously unreported assets abroad and agree to repatriate them. The government also offers a 0.5 percent tariff for small and medium enterprises with less that Rp 10 billion ($742,000) in total assets.

More than 170,000 taxpayers have joined the second part of the tax amnesty program and around 70 percent of them are small and medium enterprises, according to Hestu Yoga Saksama, director of counseling, service and public relations at the tax office.

The number of participants in the tax amnesty program, which started in July this year, has reached 563,000 by Thursday.

Tax director general Ken Dwijugiasteadi reported to the minister during her visit that the amnesty process is "under control" and that no emergency measures will be taken to address the lower-than-expected number of participants.

"Most of the high-wealth [individuals] have joined the first part of the tax amnesty, so the additional state revenue from the program will not be as high," Sri Mulyani said.

Despite the slower progress, the minister said she still "hopes for the best" and that each regional tax office has already prepared a plan to start the third part of the tax amnesty program in a bid to achieve a steady result.

So far, the government has collected Rp 106 trillion in total tax amnesty-related penalties – which include the 2 percent and 3 percent tariffs, payments of preliminary evidence from tax investigations and tax due payments – according to tax office data.

Taxpayers have also declared Rp 4,193.1 trillion in previously unreported assets and repatriated Rp 141.3 trillion so far.

The government has set a target of Rp 4,000 trillion in declared assets, Rp 1,000 trillion in repatriated assets and Rp 165 trillion in additional tax revenue.

"If the results at the end of the second part have not met our expectations, then I will step up the campaign in the last part," the minister said.

The tax office will not only focus on tax consultants in the last part of the tax amnesty program, which starts in January, Sri Mulyani said. Notaries, doctors, tax consultants, lawyers, architects, accountants, governors and executives of state-owned companies will be targeted next.

Google Understands Why Indonesia Wants Its Fair Share: Sri Mulyani

Jakarta Globe, Tabita Diela, October 27, 2016

Indonesia is bullish on reaching a settlement with technology giant Google,
Finance Minister Sri Mulyani Indrawati said on Thursday (27/10). (Reuters Photo/
Stephen Lam)

Jakarta. Indonesia is bullish on reaching a settlement with technology giant Google, Finance Minister Sri Mulyani Indrawati said on Thursday (27/10).

"We have already communicated with Google," Sri said during a meeting at the Jakarta Foreign Correspondents Club.

"I think there is at least an understanding about why Indonesia would like to have a fair share of the revenue and we do hope that we're going to reach an agreement," she said.

Senior Google Asia Pacific executives reportedly met Indonesian tax officials on Wednesday for negotiations on the company's tax bill.

"I will make sure that our team treats this issue professionally," Sri said.

The government earlier claimed that Google Indonesia, the company's local representative, paid an "unfairly small" amount in tax as it only allocated about 4 percent of its total revenue from advertisements to be subject to the 10 percent income tax.

Tax experts have urged the government to create a stronger regulation to tax over-the-top players.

Indonesia Needs More Tax Reforms While Improving Public Spending, Governance: OECD

Jakarta Globe, Ratri M. Siniwi, October 24, 2016

The Organization for Economic Cooperation and Development (OECD) says
 Indonesia had only 27 million registered taxpayers out of a population of 260
million in 2014, with only 900,000 of them having paid what they owed the
state. (Antara Photo/Wahyu Putro A.)

Jakarta. Despite strong growth in Indonesia's gross domestic product, the Organization for Economic Cooperation and Development, or OECD, says more tax reforms are needed.

In a report titled "2016 Economic Survey of Indonesia," the organization indicates that one of the country's main challenges is a narrow tax base, with only 10.7 percent of gross domestic product having been taxed in 2015, compared to 11.4 percent in 2012. It also says tax evasion is prevalent.

"Only 27 million taxpayers were registered in 2014, in a population of 260 million, and only 900,000 of those paid what they owed," the OECD said in the report.

The report also highlights the lack of efficiency in public spending and recommends that Indonesia scraps all energy subsidies, which account for 7 percent of public expenditure.

The OECD claims that this would be a necessary move for Indonesia to go green, meet renewable energy targets and boost funding for public priorities, such as education, health care and infrastructure.

The organization recommends the implementation of improved controls and performance-based budgeting if Indonesia wants to meet its target of 20 percent government spending on education and 5 percent on health.

Corruption appears to be the main factor that discourages businesses in Indonesia and hampers economic development.

According to OECD, the Corruption Eradication Commission (KPK), which plays a vital role in combating the challenge, should be provided with more resources and authority.

OECD secretary general Angel Gurria said an improvement in living standards can be seen in Indonesia, thanks to strong economic growth and social progress.

"Many challenges remain, but the government is moving in the right direction by reducing obstacles to doing business, improving the investment environment, and cutting subsidies," Gurria said in a statement on Monday (24/10).

Along with the launch of its economic survey, the OECD also introduced the "2016 Open Government Review of Indonesia," which recommends the establishment of a continuous budget for improving the quality and volume of data for public access.

Tommy Suharto Urges His Family to Join Tax Amnesty Program

Jakarta Globe, Tabita Diela & Yosi Winosa, September 16, 2016

Tommy Suharto, right, symbolically hands over his tax report to Ken Dwijugiasteadi,
director general for taxation at the Ministry of Finance, on Thursday (15/09). (SP
 Photo/Joanito De Saojoao)

Jakarta. Former President Suharto's youngest son said his family will likely join the government's tax amnesty program.

"I haven't talked to [my family about it], but they should make the best use of this program," Hutomo Mandala Putra, better known as Tommy Suharto, told reporters on Thursday (15/09).

Tommy, who owns the Humpuss Group, symbolically handed over his tax report to Ken Dwijugiasteadi, director general for taxation at the Ministry of Finance. Usually, tax reports of big taxpayers are submitted to the head of the Directorate General of Taxes.

President Suharto's children are involved in various domestic and international businesses.

"I urge Indonesians to join this program without hesitation. I take this opportunity to make things easier for my future projects," Tommy said.

He declined to reveal the value of the assets he reported, or the amount of tax he paid. He said he reported stocks, account receivables and other assets, most of which are located abroad.

Tommy is currently involved in the property sector with his Mangkuluhur City office tower development.

The tax office hopes high-net-worth Indonesians will join the program soon as the deadline for the lowest tax rate is the end of this month.

Indonesian Chambers of Commerce and Industry (Kadin) chairman Rosan P. Roeslani told the Jakarta Globe that many members of the business lobby will join the program next Tuesday.

Sri Mulyani Gets Straight to Work, Tips Spending Cuts for Ministries and Regions

Jakarta Globe, Tabita Diela, August 04, 2016

Finance Minister Sri Mulyani Indrawati plans to cut ministries and regions
spending in 2016 state budget in a bid to regain credibility on government fiscal
policy after taxation revenue fall far short its target. (Photo courtesy of World Bank/
Deborah Campos)

Jakarta. Finance Minister Sri Mulyani Indrawati plans to cut ministries and regional spending in the 2016 state budget in a bid to regain credibility on fiscal policy after taxation revenue fell far short of its target.

Sri Mulyani estimated taxation revenue will fall short of around Rp 219 trillion ($16.6 billion) from its Rp 1,539.2 trillion target in the 2016 revised state budget. That increases the risk of the government exceeding the legal deficit limit of 3 percent of gross domestic product.

"That's why ... we need to do some adjustment on the spending side so our deficit will be kept at a level that won't arouse a loss of trust in the state budget," she said on Wednesday (03/08).

The minister told President Joko "Jokowi" Widodo and other ministers at a plenary session that she will cut Rp 65 trillion from the ministries' budget and Rp 68.8 trillion in regional transfer funds.

According to the 2016 revised state budget, the allocation for ministries and government’s agency is Rp 768 trillion, which is 6 percent higher than the Rp 724 trillion spent a year ago. Transfer funds to regions totaled Rp 729 trillion, 17 percent higher compared to Rp 623 trillion last year.

The plan has already received a blessing from Jokowi, according to a statement from the Cabinet Secretariat office.

"[The plan] is fully approved by the president and the vice president. The decision is binding to all ministries and other government agencies,"  Cabinet Secretary Pramono Anung said in a statement.

Panama Papers showed vulnerability of whole system: Panama president

Yahoo – AFP, May 3, 2016

Panama's President Juan Carlos Varela delivers keynote address at a luncheon
during the Washington Conference on the Americas at the State Department on
May 3, 2016 in Washington, DC (AFP Photo/Mandel Ngan)

Washington (AFP) - The scandal triggered by the Panama Papers leak of information on how and where the world's wealthy stash funds to avoid detection or taxes underscored many countries' vulnerabilities, President Juan Carlos Varela said Tuesday.

Speaking at the State Department in Washington, the Panamanian president said the documents "reveal a worldwide problem, that involves many countries with legal and financial institutions" vulnerable to actions "that are not in the public interest."

Mossack Fonseca's founder lawyer Ramon

 Fonseca is a friend of Panama's President 

Juan Carlos Varela (shown here) and, until 

March, served as a senior advisor in his 

cabinet (AFP Photo/Rodrigo Arangua)

To that end, countries need to improve transparency and information sharing, Varela argued.

"We urge the international community to maintain a respectful dialogue through diplomatic channels," he added.

Panama and the United States last week signed an agreement on sharing of back account information in a step Panama's finance minister hailed as proof of his country's cooperation in fighting tax evasion.

The bilateral agreement comes weeks after the Panama Papers, a series of reports around the world revealing how one Panamanian law firm set up offshore entities to help the world's wealthy stash their assets.

Following the revelations, Panama has come under intense international pressure to open its financial sector to greater transparency or risk being put back on a global "tax haven" blacklist.

While the government has long said it is committed to that goal and has made some reforms in that direction, it has so far not signed up to an international standard on automatic sharing of tax information set by the Organisation for Economic Cooperation and Development.

Panama's President Juan Carlos Varela, left, sits with Singapore's President 

Tony Tan, right, for a meeting at the Istana or presidential palace on Friday, 

April 22, 2016, in Singapore. (AP Photo/Wong Maye-E)

Related Article:

Switzerland, Singapore join clampdown on bank secrecy (Update)

BPK Chairman Clarifies His Link With Panama Papers to Tax Office

Jakarta Globe, Dion Bisara, April 16, 2016

Harry said that he set up Sheng Yue in 2010, when he was still a lawmaker in the
House of Representatives, to help with a family business. But, the endeavor was
later cancelled prompting him to disown the company. (Antara Photo/eno Esnir)

Jakarta. Harry Azhar Aziz, head of the Supreme Audit Agency, or BPK, on Friday (15/04) told the tax office he sold his offshore company for one Hong Kong dollar last year, clarifying that he was not using the company to avoid tax.

Harry has been in hot water this week after Tempo magazine unveiled his name as the owner of Sheng Yue International Limited, set up with help of Panamanian law firm Mossack Fonseca. The law firm was the source of the so-called Panama Papers, the largest leaked financial records to date that shed lights on tax scandals among public officials, corporate and the rich and famous across the world.

The Finance Ministry's directorate general of tax summoned Harry on Friday to learn why his name end was on the lists. Harry met President Joko Widodo on Thursday, also to clarify the ownership.

Harry said that he set up Sheng Yue in 2010, when he was still a lawmaker in the House of Representatives, to help with a family business. But, the endeavor was later cancelled prompting him to disown the company.

"The company has no assets. You can say it was a one-dollar paper company," Harry said as quoted by Antaranews.com, after a meeting with tax officials on Friday.

"There has been no transaction and I sold it early in December 2015," he said. He also argued that setting up a paper company is a common practice in the country that allows them, in order to simplify transactions across borders and save costs.

Ken Dwijugiasteadi, the tax director general, said that that his office is still verifying Harry's claim.

"If there are back taxes, I believe he would pay. As a public official he will show a good example to the rest of the citizens," Ken said.

Last week, President Joko instructed tax office to scrutiny every name found in Panama Papers, in order to maximize tax revenue this year.

Why few Americans appear in the Panama Papers

Yahoo –AFP, Jeremy Tordjman, April 8, 2016

Issues of the German daily "Sueddeutsche Zeitung" featuring the "Panama Papers"
 with illustrations by German artist Peter M Hoffmann depicting heads of state
(AFP Photo/Christof Stache)

Washington (AFP) - From Russia to China, and Britain to Iceland, the revelations of the "Panama Papers" have tarnished officials and the wealthy over the implication that they hide riches offshore.

But one group is not there: prominent Americans. US tycoons and politicians are notably absent in the leaked files of the Panama law offices of Mossack Fonseca, which created thousands of shell companies worldwide to hide the identities of their ultimate owners, some of whom may have been evading taxes.

There is Hollywood mogul David Geffen, the Asylum Records and Dreamworks SKG co-founder. But there are no Americans comparable to Iceland's prime minister, or henchmen of the Russian president -- all in the Panama records -- at least in what has been disclosed so far.

"There are a lot of Americans, but they are more like private citizens," said Marina Walker Guevara, deputy director of the International Consortium of Investigative Journalists which coordinated the investigation and release of the Panama Papers.

However, that hardly means Americans have fully embraced financial transparency, she told AFP.

"It doesn't show that the US is outside of the offshore system; the US is actually a big player."

The Tax Justice Network's Financial Secrecy Index (AFP Photo/Alain

Bommenel, Jean Michel Cornu)

Other options

One possible reason for their small presence in the Panama documents is that US citizens hoping to hide funds and activities offshore were not drawn to Spanish-speaking Panama as a haven, when there are options like the British Virgin islands and the Cayman Islands.

"Americans have so many tax havens to choose from," said Nicholas Shaxson, author of "Treasure Islands: Tax Havens and the Men who Stole the World," a 2011 book on secretive centers for hiding money.

Indeed, Americans do not have to go abroad to hide funds and activities behind anonymous corporations: they can create them at home.

States like Delaware and Wyoming allow the creation of such companies, for just a few hundred dollars, that conceal their ultimate financial beneficiary.

And while US banks are normally required to "know their customers," they can bypass that rule and open accounts for shell companies, ensuring total discretion for someone who wants to move money around quietly.

The US Treasury is moving to stop the practice, which can be used by arms and drug traffickers to launder funds and lands the United States in third in the Tax Justice Network's ranking of the world's least transparent countries, well above Panama.

"We're in the last stages of drafting the final rule," a Treasury official told AFP.

The most popular tax havens (AFP Photo/Laurence Saubadu, Jonathan Jacobsen)

'Very frightened'

But there is another possible reason that Americans are not so visible in the Panama Papers.

Spurred by the need to halt huge, blatant tax evasion by Americans using foreign banks, Washington in recent years has cracked down with lawsuits, arrests and tighter laws that have targeted both the banks offering safe haven and those hiding money in them.

Swiss banks were hit in particular. UBS and Credit Suisse, respectively, had to pay fines of $780 million and $2.6 billion for having helped US citizens hide money.

The result, Shaxson said, is that now "there are a few tax havens around the world that are very frightened of American clients, because they know that the US can hit them."

Nevertheless, the seeming absence of Americans from the Panama Papers has fed conspiracy theories, such as claims the leak of the files was orchestrated by the CIA to destabilize Russia and other countries.

But Walker Guevara said there is still a lot to be examined in the trove of 11.5 million documents that make up the Panama Papers, and there could be more about Americans in there.

"It's a huge trove of documents and maybe there's something hiding there that we haven't found yet. It's a work in progress."

"@USTreasury has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes" —@POTUS

— The White House (@WhiteHouse) April 5, 2016

Related Articles:

President Obama Just Took a Major Step in Response to the Panama Papers
Switzerland, Singapore join clampdown on bank secrecy (Update)

Tax Office Wants to See Your Credit Card Bills

Jakarta Globe, Tabita Diela, March 29, 2016

Finance Minister Bambang Brodjonegoro is looking for ways to boost tax revenue.
(Antara Photo/Irfan Anshori)

Jakarta. The tax office seeks to access millions of Indonesian credit card bills as part of its attempt to boost tax revenue and fund the 2016 state budget, Finance Minister Bambang Brodjonegoro told reporters on Tuesday (29/03).

The Directorate General of Taxation revealed its plans to access data on bank customer's savings accounts last year, prompting bankers to retort with protection measures as part of bank secrecy laws passed in 1998.

As a result, the government is in the process of revising regulations that will impose a mandatory requirement for banks to provide customers' credit card bills to the tax office, Bambang added.

At present, the tax office solely relies on taxpayers to file a self-assisted tax return using their tax registration number (NPWP). However, these often lack relevant details and other information the tax office needs to verify whether a would-be taxpayer has indeed paid all taxes.

"Without enough data, we are basically going to war without any weapon. Our weapon is data, but we still need [the requisite authority and] more access to banks and [Communication and Information Technology] Ministry data," Bambang said.

Mind the gap

According to the 2016 state budget, the tax office must collect at least Rp 1,360 trillion ($100 billion) in taxes this year, which is 28 percent higher than last year's tax revenue realization of Rp 1,061 trillion, as the government needs more money to fund more infrastructure projects.

Last year, the government only collected Rp 9 trillion in income tax from 900,000 individual taxpayers. Only 9.8 million of the total of 27,571,471 registered individual taxpayers filed tax returns, when there should be more than 120 million in the population of around 250 million.

Other measures

The tax office has also taken steps to cooperate with the Attorney General's Office (AGO), the State Intelligence Agency (BIN) and the National Police in order to gather information on high net worth individuals.

The tax office also seeks to tighten supervision of Indonesia's growing e-commerce sector, with particular attention to payment of value added tax for each transaction over the Internet.

It has also officially introduced, in January, an online payment system that is expected to boost transparency and eventually replace the current manual method of record keeping.

Not so secret

Meanwhile, Singapore has said it would automatically start sharing information with foreign tax authorities from 2018, in line with an agreement signed by more than 51 countries in 2014 that seeks to put an end to tax evasion. As a result, the days of undisclosed assets held offshore may become a thing of the past.

For local banks in Indonesia and elsewhere, the pressure on Singapore is opening up opportunities at home.

To yield greater payment of taxes in Indonesia, a Tax Amnesty bill is currently being deliberated by the House of Representatives with the hope that money parked in offshore accounts will be repatriated to Indonesia.

Indonesia is Singapore's main source of wealth assets, where some $225 billion is believed to be parked in Singapore alone.

"Indonesia accounts for 30-50 percent of business for private banks in Singapore," a Singapore-based banker at a top global wealth manager told Reuters last year.

Editing by Mika Vaswani

Uber Is ‘Stealing Money’ Through Unregulated Operations, Basuki Says

Jakarta Globe, Deti Mega Purnamasari, Jun 26, 2015

Uber is not welcome in Jakarta unless it sets up a proper office in the country and

 abides by prevailing public transportation regulations, the governor say. (Reuters

Photo/Charles Platiau)

Jakarta. Jakarta Governor Basuki Tjahaja Purnama said he would have a meeting with representatives from California-based ride-sharing app Uber only if the company promised to set up an office in the country.

“If they had wanted to meet me [to seek permission] from the beginning, then I would have done it. But now, if they wish to have a meeting with me, they must establish a company [here],” Basuki said at City Hall on Friday.

He added that representatives from the parent company, Uber Technologies, had spoken to him in person inquiring why they were banned from operating in the city.

Uber’s Jakarta operations currently run from a rented office space at the Pacific Place mall in the Sudirman Central Business District, South Jakarta.

Basuki claimed that Uber reaped profits of up to 20 percent from its operations in the city but did not pay any tax.

“They are stealing money in my area,” he said.

Shortly after its launch in Jakarta last August, Basuki branded Uber “illegal.”

Last week, the Jakarta Police arrested five drivers using the Uber app after receiving reports from the city’s transportation agency and the Organization of Land Transport Operators, or Organda.

The police said the five drivers would only be questioned as witnesses not as suspects.

The arrests mark the latest in a series of legal and regulatory speedbumps for Uber Technologies, which is already facing multiple lawsuits around the globe for bypassing industry regulations.

Desperate for Tax Money, Indonesia Ready to Grant Criminals Amnesty

Jakarta Globe, Tabita Diela & Yosi Winosa,  Jun 05, 2015

An officer is seen serving tax payers at a tax office in Gambir in Jakarta
on April 2, 2015. (Antara Photo/Rosa Panggabean)

Jakarta. Indonesia plans to let corruptors, tax evaders, and forest and mining illegal poachers to put their money in government bonds, in a move that would reprieve criminals of their past crimes and provide government with additional revenue.

“We have reasons to study and throw this idea to the public. We have very limited data of Indonesians’ possessions and wealth abroad,” said Mekar Satria Utama, director of counseling, service and public relations with the director general of tax at the Finance Ministry on Friday.

“We heard there are 3,000 to 4,000 trillion rupiah [of Indonesians’ assets] in Singapore. That’s the potential,” Mekar said.

The tax directorate general said last week that the government is preparing a bill that will grant amnesty to criminals — except drugs offenders and terrorists — as long as they agree to bring in their ill-gotten money to Indonesia under the government’s terms and conditions. The government is targeting to complete the bill by October.

Mekar said the state plans to offer a remission for crimes such as corruption, money laundry, illegal logging and illegal mining.  Still, those offenders must pay bail of 10 percent to 15 percent of the value of their crime to the government. The offenders must shift some of their “investment portfolios and cash” into government bonds with maturities of five to 10 years, said Mekar.

The government had launched similiar tax remission programs in 1984 and 2004 but failed to attract any interests from offenders because they were not backed with a law that offered amnesty.

Tax experts see the government’s policy as a “paradox” and a “bad idea” as it would reduce taxpayers’ compliance in the future.

“It is such a controversy. It’s not fair for those who have been compliant [with the law]. When the policy is implemented, they will most likely become less obedient,” said Setyo Budiantoro, the director of Prakarsa, an economic policy research center.

Setyo encourages the government to engage more in country-to-country tax reporting and automatic information exchange.

“We need to improve taxpayer compliance first, then we deal with amnesty,” he said.

The government has waived penalties for five years on back taxes that tax payers must comply with by the end of this year, as part of efforts to boost revenue from taxes this year in order to fund ambitious development projects.

President Joko Widodo’s administration is targeting a tax-to-GDP ratio of 16 percent, up from 12 percent in 2013. Still, only 4 million Indonesians from the 250 million current population pay tax. Tax revenues — excluding revenue from customs — in the first quarter of 2015 reached Rp 198 trillion ($15 billion), compared to Rp 1,294 trillion for a full-year target.

GlobeAsia

Indonesia Sets Second Tax Amnesty Program for April 29

Jakarta Globe, Margye J. Waisapy, Apr 24, 2015

The directorate general of tax set to launch the second sunset policy tax program
 by the end of this month as a way to help reach 2015’s tax revenue target.
Antara Photo/Zabur Karuru)

Jakarta. Indonesia’s directorate general of tax is set to launch its second tax amnesty program on April 29, as a way to help reach the government’s tax revenue target of Rp 1,249.3 trillion ($92 billion) for 2015.

This policy allows corporate and individual taxpayers to pay and report back taxes without penalty or interest charges for up to one year from the start of the amnesty date.

President Joko Widodo will set the policy on April 29, a day before the deadline for companies to report taxes. The tax office will start taking in back taxes in May.

This is the second so-called sunset policy — for either voluntary or mandatory program — after the first one in 2008 helped increase tax revenue by about a third to a total of Rp 566 trillion ($44 billion).

“I can’t predict this year’s tax revenue, but there was a 30 percent growth in 2008, and I hope that it can grow by over 30 percent this year,” director general of taxation Sigit Priadi Pramudito said on Thursday.

GlobeAsia

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Swiss account secret of HSBC chief Stuart Gulliver revealed

Leaked files covering 2005-2007 show bank chief executive sheltered £5m of his own money at Panamanian company with Swiss HSBC account

The Guardian, James Ball, Juliette Garside, David Pegg and Harry Davies, 22 February 2015

Stuart Gulliver in Hong Kong in 2012: leaked files show that the HSBC chief
 executive was a client of the bank’s Swiss subsidiary at the centre of the scandal.
Photograph: Bloomberg via Getty Images

Stuart Gulliver, the HSBC chief executive who has vowed to reform the crisis-hit bank, sheltered millions of pounds in a Swiss account through a Panamanian company and remains tax domiciled in Hong Kong.

Leaked files show that the Derby-born Gulliver, who is due to present HSBC’s annual report on Monday in the wake of the international controversy over its Geneva-based private bank, was also one of its clients, holding about £5m in a Swiss account.

The bank executive was listed as the beneficial owner of an account in the name of Worcester Equities Inc, an anonymous company registered in Panama, containing a balance in 2007 of $7.6m. It was through this entity that Gulliver’s HSBC bonuses were paid until 2003. He also held a second account in the name of Worcester Foundation, which had been closed before 2007.

Although now based in the UK, where HSBC has its headquarters, Gulliver is domiciled in Hong Kong for legal and tax purposes.

The banking details have emerged as the 55-year-old Oxford University graduate, who became chief executive in January 2011, is due to face questions from reporters and investors for the first time since the Guardian and other media outlets published the leaked HSBC files, which revealed misconduct at the bank’s Swiss subsidiary.

The documents, covering 2005-07, detailed how the private bank was complicit in tax evasion and aggressive tax avoidance, doled out bricks of cash in mixed currencies to clients, and provided banking services to criminals, drug smugglers, and friends and families of dictators.

Gulliver has already personally signed a “sincere apology” which appeared in three newspapers last Sunday, saying “the standards to which we operate today were not universally in place in our Swiss operations 8 years ago”.

The bank is expected to announce on Monday full-year profits for 2014 in excess of £13bn – and Gulliver’s total compensation package has been predicted to be around £7.5m, although it was reported over the weekend that he may surrender some of his remuneration because the bank agreed to pay fines to settle unrelated allegations of foreign exchange rigging last year.

In response to queries from the Guardian about his personal account as revealed in the leaked files, a representative for Gulliver said he had made use of HSBC Suisse to hold his bonus payments prior to 2003, when he moved from Hong Kong to London.

Lawyers for Gulliver said that Hong Kong tax had been paid on this income – and explained that he “followed this procedure because he wanted his taxed bonus earnings to remain private from his then colleagues in Hong Kong, which they would not have done if he had kept them in an HSBC Hong Kong account”.

The Guardian asked Gulliver why he used a Panamanian company to hold the funds, given Swiss accounts already offer secrecy. His lawyers declined to answer.

Gulliver’s legal representatives added that his Swiss accounts have “for a number of years” been voluntarily declared to UK tax authorities. They declined to specify the exact date they were first declared.

Gulliver is also among those current and former clients of HSBC Suisse to take advantage of non-dom status. Gulliver is a registered non-dom based on his long residence in Hong Kong – now a special administrative region of China – which he considers to be his home, despite his UK-based position.

A representative for Gulliver said: “Having lived there since the 1980s, our client has become a permanent Hong Kong resident with right of abode, as has his wife who is an Australian national. Hong Kong continues to be their home albeit that our client now works primarily in the UK. As a matter of law, our client is domiciled in Hong Kong.”

Non-dom status can confer several tax advantages on those who claim the status compared with those domiciled in the UK. These include advantages in how inheritance tax is applied, but can also exempt worldwide income earned from outside the UK from incurring UK taxes – a system known as the remittance basis.

Gulliver’s lawyers confirmed he was “entitled to claim the benefit of the remittance basis”, but did not say whether or not he did so. If Gulliver were on the remittance basis, he would not need to pay tax on investment income held outside the UK – which would include holdings in Swiss bank accounts.

A representative for Gulliver said that he had paid all relevant income taxes: “Full UK tax has been paid on the entirety of his worldwide earnings less a credit for tax paid additionally in Hong Kong (where he is also tax resident) on that part of the same earnings doubly taxed.”

John Christensen, director of the Tax Justice Network, which has campaigned for abolition of non-dom tax benefits in the UK, said the non-dom quirk was particularly attractive for anybody who had accumulated assets such as homes and bonuses offshore, because any gains on offshore assets would be sheltered from UK tax.

“For my part I think it illustrates the absurdity of the rule, which should have been abolished many years ago. It serves no useful purpose and is hugely discriminatory against ordinary UK taxpayers,” he said.

Separately, Gulliver did not become employed by HSBC’s main holding company when he took over as chief executive of the bank in 2011. Documents seen by the Guardian at the time showed that Gulliver took the job of chief executive officer as a secondment from the Dutch-headquartered HSBC Asia Holdings, rather than take a straightforward appointment to the UK parent company.

A spokesman for HSBC said around 350 of its staff were employed through the Netherlands. “About 350 of the bank’s most internationally-mobile employees are employed by HSBC BV,” he said. “This enables them to be employed/seconded to any part of the global group without the need to change contracted employer.”

Representatives for Gulliver declined to explain for what purpose he was employed through the Netherlands subsidiary.

Gulliver has repeatedly emphasised to the public and to lawmakers that the culture of the bank, as well as its safeguards, has changed – both in the wake of the HSBC Files, and previous scandals including Libor rigging, and involvement with Mexican money laundering.

Since the publication of the HSBC files, the bank has been keen to stress that it has downsized the Swiss business, reducing the number of clients by 66%, to around 10,000. However, the total value of assets in those accounts – $68bn (£44bn) – has fallen by only 42%.

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