Tax Avoidance: 3 Examples of Cases in Indonesia

Tax avoidance is an effort to avoid or save taxes that are still within the framework of meeting the provisions of the law.

Tax is a mandatory contribution to the state that is owned by an individual or entity that is coercive in nature based on the law, with no direct compensation. Using it for the purposes of the state for the prosperity of the people is not a transfer of wealth from one person to another.

Paying taxes is mandatory for every citizen. But there are still many who violate it by trying to avoid tax. This is certainly very detrimental to the country. The loss caused by tax evasion is also not a small nominal but almost tens of trillions.

Tax evasion usually has 3 ways, namely refraining, moving location, and juridical tax avoidance.

This article will discuss several cases of tax evasion that occurred in Indonesia. The following is a case of tax evasion that occurred in Indonesia:

Case of Avoidance by PT. Google Indonesia

PT. Google Indonesia is a representative company in Indonesia that provides internet products and services including advertising services. From estimates, Google earns fantastic revenue with this advertising service. And the source that has been google can is in Indonesia. However, since it was officially established in Indonesia, it is suspected that Google has never paid its taxes. Even though Google has criteria as a permanent business entity that can be taxed and analyzed in its financial statements.

The Tax Avoidance Case of PT. Coca-Cola

In 2014, a company in the Coca-Cola Company group, namely PT Coca-Cola Indonesia (CCI) committed tax evasion, resulting in an underpayment of Rp. 49.24 billion.

But PT. CCI feels that it has paid taxes in accordance with the provisions.

The results of a search by the Directorate General of Taxes (DGT), Ministry of Finance, showed that there was a large increase in costs from 2002-2006. The large cost burden causes the taxable income to decrease so that the tax deposit also decreases. The expenses included, among others, advertising for the period 2002-2006 with a total of Rp 566.84 billion.

According to the DGT, CCI’s total taxable income for that period was Rp 603.48 billion. While the CCI calculation, taxable income is only Rp 492.59 billion. With this difference, the DGT calculated the CCI’s shortfall in income tax (PPh) of Rp 49.24 billion.

The Tax Avoidance Case of PT. Garuda Metalindo

In 2014, PT. Garuda Metalindo conducts tax avoidance by utilizing capital obtained from loans or debts to avoid paying taxes that must be borne by the company. Where in the financial statements there is an increase in the company’s balance sheet with the value of short-term bank loans reaching Rp200 billion as of June 2016.

We, as citizens, should never evade taxes, because currently, around 80% of APBN funds come from tax revenues. Therefore, this proves that tax revenue has become a reliable backbone of state revenue and the role of taxes is also very large for the state. Thus the discussion of 3 cases of tax evasion that occurred in Indonesia. Hopefully, this discussion can help you.