First family tax returns raises flags

 

Rendi A. Witular and Hans David Tampubolon, The Jakarta Post, Jakarta | Headlines | Wed, January 30 2013, 9:42 AM

  

Paper Edition | Page: 1

An old phrase says nothing in life is certain but death and taxes. At a time when the nexus of power and wealth is viewed with skepticism, a peek into their tax returns might be expected to reveal the financial affairs of Indonesia’s first family.

Just like any other eligible, law-abiding citizens, President Susilo Bambang Yudhoyono and his two sons — Maj. Agus Harimurti and Edhie “Ibas” Baskoro — file tax returns.

Documents obtained by The Jakarta Post show Yudhoyono’s 2011 tax returns, submitted in the first quarter of 2012. He earned Rp 1.37 billion (US$143,000) during that year as President, in addition to Rp 107 million in income from royalties.

The validity of these documents was confirmed by sources at the Finance Ministry’s taxation directorate general.

The documents further revealed that in 2011 Yudhoyono opened bank accounts worth Rp 4.98 billion and $589,188. The return does not provide specific details for these funds. Presidential spokesman Julian Pasha did not respond to the Post’s request for clarification on Tuesday.

The Post was unable to obtain the President’s previous tax returns, hence it is not known whether the deposits were a carryover from prior holdings or a new accumulation.

Yudhoyono has been very explicit about the need for citizens to fulfil their tax obligations, including the need for transparency regarding the wealth of officials. “Let’s develop a respectable culture […] creating a government which is clean, transparent responsive, accountable,” he said at the Directorate General of Taxation in 2009 as he submitted his annual tax returns.

Agus, 34, declared in his 2011 returns to have earned Rp 70.2 million in annual income. Agus is an officer with the Army’s Strategic Reserve Command (Kostrad) in Jakarta.

The tax documents also revealed that Agus opened four different bank accounts and a deposit account totaling Rp 1.63 billion. There was no information in the documents as to how the additional income was earned as the section for extra income — including that of his wife, fashion model Annisa Pohan — was left blank.

Agus has been listed as a taxpayer since 2007, but had not submitted a tax return until 2011.

Ibas explained on behalf of his brother that based on the law only high-ranking military officers were obliged to submit wealth reports.

“Mas Agus’ is currently only a major,” he said in his email.

Ibas said that he himself, “as a public official, in my capacity as a House legislator, have consistently submitted my wealth report to the KPK since 2009 and I have always fulfilled my obligations to submit my annual tax report in line with the law.”

According to Ibas’ 2010 tax return, he earned Rp 183 million as a Democratic Party lawmaker. He also had an investment worth Rp 900 million with PT Yastra Capital, a cash deposit amounting to Rp 1.59 billion and cash equivalents of Rp 1.57 billion.

Ibas did not declare any extra income, such as dividend payments, donations, stocks or investment proceeds. He had total assets of Rp 6 billion as reported in his 2010 tax return, including an Audi Q5 SUV car worth Rp 1.16 billion.

As a legislator, Ibas is required to report his wealth to the Corruption Eradication Commission (KPK), where he declared assets worth Rp 4.42 billion in 2009. In his 2009 tax return, Ibas’ assets were valued at Rp 5.18 billion. He declared no additional income from other sources.

Ibas’ father-in-law, Coordinating Economic Minister Hatta Rajasa, had earlier told the Post that “as father to both of them, I can assure you that there are no discrepancies whatsoever in their tax returns”.

Taxation director general Fuad Rahmany told the Post there should be a rational explanation if any discrepancies were suspected in the tax affairs of the first family.

“There is no way that the President’s family failed to properly fill in their tax returns. They have a special team that thoroughly calculates their tax obligations to ensure accuracy.”

Fuad also said that the directorate “does not have the authority to question taxpayers over any mismatch between their bank accounts and their annual earnings”.