Markus Junianto Sihaloho & Rizky Amelia – Twelve beef import companies, including Indoguna Utama, teamed up to evade tax payments and use the funds saved to bribe lawmakers and customs and excise officials, according to a private investigation carried out by a rival of a politician allegedly caught in the case.
Indoguna Utama directors were last month caught paying bribes allegedly intended for former Prosperous Justice Party (PKS) chairman Luthfi Hasan Ishaaq.
Dradjad Wibowo, an economist who is also the deputy chairman of the National Mandate Party (PAN), said he conducted his investigation based on unpublished data from state institutions.
Dradjad said most of the 12 companies involved in the practice were new players in the beef import industry. "By using all sorts of excuses, the import 'mafia' was able to enjoy a VAT [value-added tax] exemption for the beef import," he said.
"As a result, the state incurred Rp 546 billion [$56.5 million] in VAT losses from beef and gizzards for the January 2010-July 2011 period." The amount of VAT that should have been paid was Rp 548.8 billion, he said.
"Out of that figure, only Rp 2.8 billion was paid to the state. The remaining Rp 546 billion was exempted, which means the importers received an additional profit," Dradjad said.
The exempted VAT amount matched the fee the importers paid to the people who "helped" them. Dradjad said the fee reached Rp 5,000 per kilogram for beef and Rp 2,000 per kilogram for gizzards. "If you multiply the import data, you will reach Rp 452.5 billion, plus Rp 99 billion, for [a total of] Rp 551.5 billion," he said.
"In other words, you could say that the fees or bribes paid to political parties and non-party political people were paid from the exempted VAT. "The law enforcers should start investigating... the VAT exemption."
The second source of funds used to pay the fee was said to be from changing the classification of the meat into gizzards, he said. Dradjad said that based on regulations, importers have to pay import duty of 5 percent of the customs value of the imported good.
The customs value is calculated based on the cost price, insurance and freight (CIF), or a benchmark value set by the Directorate General of Customs and Excise. Since the CIF of gizzards is cheaper than that of beef, recalcitrant importers allegedly reported that they were importing gizzards instead of beef.
This mode of operation was used by four importers – identified as I.G.U., I.P., S.L.P. and B.M.A. – which Dradjad said he found after comparing the import data from the Directorate Customs and Excise and the data from the Agriculture Ministry's Agricultural Quarantine Agency (Barantan).
Data from Customs and Excise showed that the four companies imported 13.5 million kilograms of beef for the January 2010-June 2011 period. Data at Barantan showed that they actually imported 28.3 million kilograms of beef in the same period.
"This means the beef import data at the Customs and Excise office was 14.8 million kilograms lower than the data at Barantan," said Dradjad. Customs and Excise data showed 31.0 million kilograms of gizzards were imported, but Barantan data showed only 7.8 kilograms, a gap of 23.2 million kilograms.
"Based on the documents that I obtained, the state incurred potential losses from import duty income, VAT and income tax of Rp 48.5 billion from that practice. And that's just a figure from four importers," Dradjad said.
He called on law enforcers to pursue the case beyond the allegations levelled at Luthfi and the directors at a single company. He said they should also take action against corrupt officials, saying that the practice could not have been possible if staff at the Customs and Excise office had not played a role.