Jakarta, Indonesia Sentinel — Indonesia’s Financial Supervisory Agency, the BPKP (Badan Pengawasan Keuangan dan Pembangunan), has responded to reports of an alleged loss of Rp 300 trillion ($19 billion) in state revenue from the palm oil sector.
The issue came to light following comments from Hashim Djojohadikusumo, Deputy Chair of the Gerindra Party’s Supervisory Board and brother of Indonesia’s President-elect Prabowo Subianto.
Hashim revealed that more than 300 businesses have failed to pay their taxes, accumulating Rp 300 trillion in unpaid obligations. These businesses, he claims, are delinquent on taxes owed to the government.
“There is a list of over 300 entities that owe Rp 300 trillion in unpaid taxes. This is data gathered by the government,” Hashim said. He also emphasized that these businesses need to settle their debts promptly. “We’ll send them a friendly reminder to pay up,” he added.
Roots of the Missing Revenue
Jodi Mahardi, a spokesperson for the Ministry of Maritime Affairs and Investment, clarified that the data Hashim referred to originated from an audit conducted by BPKP. The Rp 300 trillion represents potential revenue that the state could recover by improving governance in the palm oil industry.
“This potential state revenue can be secured through better management of the palm oil sector,” Jodi explained on Monday, October 14, 2024. He added that the identified revenue stems from various sources, including administrative fines related to violations of plasma obligations and illegal palm plantations in protected forest areas. Additionally, the government sees potential through tax expansion and intensification efforts.
“These funds come from administrative fines for failing to meet plasma requirements, from illegal plantations in forest areas, and through broader and more aggressive tax collection,” Jodi elaborated.
BPKP Confirms Findings of Indonesia’s Palm Oil
Muhammad Yusuf Ateh, head of the BPKP, confirmed that the findings cited by Hashim were accurate and based on an audit conducted by the agency. He noted that the audit process is ongoing and did not disclose any preliminary details.
“Yes, the findings are correct,” Ateh affirmed on Monday, October 14, 2024. However, he declined to provide additional information as the audit is still in progress.
The Attorney General’s Office has also weighed in on the issue, signaling its support for the government’s efforts to recover the missing revenue. Harli Siregar, Head of the Attorney General’s Information Center, stated that law enforcement is ready to assist in addressing the problem through legal means.
“We are committed to helping the government through legal enforcement, within our jurisdiction,” Siregar said. The Attorney General’s Office suspects that large-scale illegal land grabs in protected forest areas may be contributing to the revenue losses. These illegal palm oil plantations have caused significant economic and financial damage to the state, according to Siregar.
However, Siregar did not disclose the exact amount of revenue lost nor did he confirm if any suspects had been identified. “Investigations are still in the early stages,” he stated.
300 Indonesian Businesses Owe $19 Billion in Unpaid Taxes
As the investigation continues, the Ministry of Maritime Affairs and Investment has also acknowledged the severity of the issue. Jodi Mahardi reiterated that the Rp 300 trillion in lost revenue could be recovered with reforms in palm oil governance. Improving transparency and regulation in the industry is key to preventing further losses and ensuring the sector contributes its fair share to the state’s finances.
The audit findings from BPKP underline the need for structural reforms and enhanced legal enforcement to address ongoing issues within Indonesia’s palm oil industry, which plays a vital role in the country’s economy but has been plagued by governance challenges for years.
(Becky)
