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BPK Investigating Tax Office in Upcoming Audit
Dion Bisara | October 12, 2010

Hadi Poernomo, director of the Supreme Audit Agency, is looking into the tax office’s methods. Hadi Poernomo, director of the Supreme Audit Agency, is looking into the tax office’s methods.
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Jakarta. The Supreme Audit Agency is finalizing a report on the methods used by the Directorate General of Taxation during investigations into a number of corporations accused of tax violations.

Hadi Purnomo, chairman of the agency, also known as the BPK, declined to provide any details about the findings, or to say when it would be released.

“Yes, we are working on it, but it has not been finalized,” he said.

However, Golkar Party lawmaker Melchias Markus Mekeng, a critic of the tax authority, said the BPK had uncovered violations of the tax office’s procedures, based on a preliminary report he saw last week.

“It was a mess. [The tax office] breached regulations that they made themselves. There are procedures to follow in investigating such tax cases, but they did not do it,” Melchias said.

He is the chairman of the working committee on taxes for the House of Representatives’ Commission XI, which oversees financial affairs.

In late May, he called for the dismissal of two senior tax officials, including director general Mochamad Tjiptardjo, for what he called “poor performance” in handling cases of companies such as Permata Hijau Sawit, Wilmar and Asian Agri.

His statement came a day after the Supreme Court ruled in favor of Kaltim Prima Coal in its tax-evasion case.

KPC is a unit of Bumi Resources, the flagship of the Bakrie Group owned by the family of Aburizal Bakrie, the powerful chairman of Golkar.

Three Bakrie companies, including Bumi and KPC, have been accused of evading a total of Rp 2.1 trillion ($227 million) in taxes during the 2007 tax year.

The BPK began its audit of tax office methods in June, at the request of Melchias’s committee, which specifically asked it to look at the cases involving KPC, Permata Hijau Sawit, Asian Agri and Wilmar, among others.

A number of high-profile corruption scandals have emerged from the tax office over the past year.

They include the case of Gayus Tambunan, a former tax official who amassed more than $11 million in personal assets and said most of the money came in the form of bribes from companies such as KPC and Bumi.

Mayasak Johan, a lawmaker from the United Development Party (PPP) and member of the working committee on taxes, said the committee would ask the tax office to reopen any cases in which it was found to have violated regulations.

Nusron Wahid, a Golkar lawmaker and member of the working committee on taxes, said the BPK had told the committee the report would be delivered by the end of the month.

Finance Minister Agus Martowardojo declined to comment on the BPK’s probe.