Rp 20 Trillion Potentially Lost from Mineral and Coal Tax

TEMPO.CO, Jakarta - Deputy chief of the Corruption Eradication Commission (KPK) Adnan Pandu Praja, said that over Rp 20 trillion has been potentially lost from tax revenues out of the mining sector in 2012, caused by mismanagement of mining data at the directorate general of tax at the finance ministry, directorate general of mineral and coal at the energy ministry, and the local government.

"Based on investigation by the KPK, 23.61 percent out of 3,826 mining permits owned by 3,066 companies do not have taxpayer registration number," said Adnan on Wednesday, April 23, 2014, after presenting the results of the investigation conducted from August 2013 to March 2014.

According to Adnan, the potential tax loss was also caused by differences in coal production data recorded by the Directorate General of Mineral and Coal and the Central Statistics Agency (BPS). He said that because of the discrepancy, tax collection from coal mining companies was not optimized. "This also makes it difficult to supervise the tax officers and taxpayers, which creates opportunities for corruption," said Adnan.

Adnan explained that based on the KPK's findings, limited human resources also contributed to the lack of supervision against taxpayers. He said that the employee proportion at the directorate general of tax was 60 percent for non-supervision duties and only 40 percent for supervision.

He also said that tax inspectors mostly spent their time checking for“overpayment” instead of "underpayment" or inspection bapsed on risk analysis. Moreover, the KPK concludes that the analytical capacity at the Tax Office was not up to par. As a result, the agency is having difficulty in estimating revenues and determining tax potential.

MUHAMAD RIZKI