From Antara News Agency http://www.antara.co.id/en/seenws/?id=8580

ICW: Govt. Must Audit Tax and Customs Offices

Jakarta (Antara News) - Indonesia Corruption Watch (ICW) has urged the government to audit tax offices and customs & excise offices in the country to uncover fictitious export practices and to capture those committing fictitious export who have asked for tax restitution.

The audit must be carried out by independent audit institutions, ICW Vice Coordinator Luki Djani said here Tuesday, adding that the step is required capture those committing fictitious export who have asked for tax restitution.

The audit of tax and customs offices should be focused on the system with loopholes for stealing state funds through fictitious export practices, and by auditing the system at least tax restitution in the past five years can be detected so that the stealing of the public funds can be traced, Luki said.

Practicing fictitious export and then asking for tax restitution is an unlawful deed which involves a number of public institutions, from the issuance of export permits to the provision of export documents, he explained.

There is a long procedure for a company or an individual to manage to receive tax restitution, so it is actually difficult for those practicing fictitious export to obtain tax restitution with the involvement of insiders, he added.

The forgery of export documents can be committed only by a syndicate that really knows the procedure and loopholes in the system that can be used to manage fictitious export to steal public funds, he said.

Previously, the police discovered the forgery of export documents to be used to ask for tax restitution. To bolster export, the government has offered various incentives, including the exemption of export by taxable companies from value added tax, so that exporters can appeal to the Directorate General of Taxation for the repayment of already paid tax.

Finance Minister Sri Mulyani Indrawati has instructed to the Directorate General of Taxation to review the payment of tax restitution as tax repayment in 2005 amounted to approximately 19 trillion.(*)
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