Robert Go, Jakarta – Indonesia is planning to crack down on major tax evaders in an attempt to raise state revenues and reduce corruption, a move that could pose serious problems for the family of former President Suharto and his associates who may have benefited from the sloppy enforcement of regulations and patronage during his 32-year rule.

Chief Economics Minister Rizal Ramli, flanked by key tax and enforcement officials, announced on Thursday that the government had gathered evidence of tax crimes committed by 100 major institutions and 50 wealthy individuals. "The director-general of taxation will launch a massive investigation next week," he told reporters.

According to Dr Rizal, Indonesia has reasonable tax regulations, but inefficiency and graft by officials could account for the revenue losses amounting to trillions of rupiah each year. "From this point forward, we mean business," he said – although he declined to publicise the names of those on the list of offenders.

But a Finance Ministry source said that the Suharto family and associates of the former President, including ex-government officials and some business tycoons, might figure prominently. "A small group of people grew very rich during the Suharto era. It makes sense that the government will investigate them for possible graft and tax fraud violations," the source said.

Attorney-General Marzuki Darusman did not rule out slapping of tax evasion charges against Mr Suharto and his family, but stressed that the government would continue to press on with existing indictments to bring them to justice. Mr Suharto is currently facing a resumed corruption trial while his youngest son, Hutomo "Tommy" Mandala Putra, is a fugitive from justice.

Mr Marzuki said that each Indonesian citizen, regardless of his wealth or position, faced the possibility of being investigated over his past, present and future tax crimes. Under current tax evasion regulations, those convicted of tax fraud can be fined up to four times their original tax bill and/or sentenced to imprisonment.

Indonesia's state budget is under tremendous pressure because of the cost of rebuilding the country's weakened financial institutions. According to recent statistics, revenues expected this year from taxes amount to just over 11 per cent of the country's gross domestic product, a figure that the government wants to raise to 16 per cent by 2004.

Mr Machfud Sidiq, the administration's top taxman, complains frequently that of the country's 200 million people, only 1.3 million possess tax identification numbers and pay taxes regularly. The official has also said that even some of Indonesia's leading politicians and government officials do not have tax numbers and thus contributed to the country's prevailing tax woes.