Indonesian Finance Minister Cracks Down on Importers' Tax Evasion

Uncovering Under Invoicing Practices

Finance Minister Purbaya Yudhi Sadewa has exposed a concerning trend of tax evasion among importers through the practice of under invoicing. During a recent visit to the Tanjung Perak Customs Office, the minister discovered that some importers were deliberately declaring lower prices on import invoices to avoid proper tax payments. This illegal practice not only results in significant revenue losses for the state but also creates an uneven playing field for compliant businesses.

The Mechanism of Under Invoicing

Under invoicing involves importers stating a lower value for goods on import invoices than the actual transaction value. This practice allows importers to reduce their tax liabilities, giving them an unfair competitive advantage in the market. The Finance Minister's findings highlight the need for stricter customs supervision and more effective monitoring mechanisms to prevent such tax evasion schemes.

Government Response and Future Measures

The discovery of these practices underscores the importance of robust customs oversight and the need for the government to implement measures to deter such activities. The Finance Minister's actions demonstrate the government's commitment to ensuring compliance with tax regulations and protecting state revenue. Further measures may include enhanced scrutiny of import declarations and collaboration with relevant authorities to address this issue effectively.