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.