Govt to take harsh measures  against tax evaders: VP

The Jakarta Post, Jakarta | Business | Sat, January 31 2015, 6:19 PMThe government will take harsh actions against those evading payment of taxes, regardless of their social and economic backgrounds, says Vice President Jusuf Kalla.

He stressed that with the current implementation of “gizjeling”, meaning taxpayers would to be taken as hostages, more tax evaders would be incarcerated for failing to pay their taxes to the state.

“The imposition of gizjeling is in line with the law and is part of the effort to discipline the people into paying their taxes. Delinquent taxpayers will be taken as hostages,” he said when visiting a subsidized public housing project in the Jajar neighborhood in Surabaya, East Java on Saturday.

He added that the government was determined to take harsh measures against taxpayers who do not pay their obligations because taxes are the main source of state revenues.

He further noted that Indonesia has so far been a haven for tax evaders because in many countries tax evaders are jailed.

“In the United States, for instance, people are jailed for tax evasion,” Kalla said as quoted by Antara News Agency

The Vice President made the statement in response to the Directorate General of Tax’s recent action of taking a delinquent taxpayer as a hostage.

This is a form of law enforcement that improves the people’s compliance with the law and the state, he stated, referring to the tax authorities’ move of sending a taxpayer as hostage to Salemba Prison for evading tax payment.

A 61-year-old executive, identified only as SC, of a foreign investment company PT DGP that traded in leather was arrested and held hostage in the prison because of the company’s failure to pay taxes worth Rp 6 billion (US$470,000) in the last five years.

SC was arrested because he was the only person held responsible for the company’s tax payments. He was apprehended in Tanah Abang, Central Jakarta on Friday.

Furthermore, the director of tax examination at the Finance Ministry, Dadang Suwarno, said in a press release that the decision to hold SC hostage was made after several measures taken to encourage him pay the company’s taxes failed. The measures included the issuance of notices, confiscation letters, travel bans and the blocking of assets.

SC will be held in prison for six months. If the company fails to pay its taxes, his incarceration will be extended for another six months, or until the taxes are paid

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