http://www.theaustralian.com.au/news/world/susilo-bambang-yudhoyono-reform-plan-hit-by-tax-scandal/story-e6frg6so-1225847151686
Susilo Bambang Yudhoyono reform plan hit by tax scandal Stephen Fitzpatrick, Jakarta correspondent From: The Australian March 30, 2010 12:00AM INDONESIAN President Susilo Bambang Yudhoyono's economic reform program is in serious doubt as details emerge of a multi-million-dollar tax office embezzlement scandal, allegedly involving senior police, prosecutors and judges who were bribed to ignore the rorts. The revelations could have serious implications for the Australian government's relationship with Finance Minister Sri Mulyani Indrawati, whose departmental reform strategy has included major co-operation with AusAID programs. Dr Indrawati yesterday said she had ordered an internal investigation into the scandal, to determine whether it was an isolated case "or whether there were colleagues or superiors involved". The revelations centre on 28 billion rupiah ($3.39 million) in bank accounts held by a 30-year-old previously unknown tax department official Gayus Tambunan, who last week fled to Singapore, apparently with his wife. Despite lengthy negotiations between the two countries, Indonesia still does not have an extradition treaty with the island state. Singapore was well known during the crony capitalist years of the late dictator Suharto as a place for corrupt Indonesians to park large sums of money without fear of penalty. The case is part of a much bigger scandal involving what Dr Yudhoyono has admitted is a "judicial mafia", a term that gained official currency late last year with the exposure of criminal behaviour tied to the infamous 6.7 trillion rupiah bailout of the midsized Bank Century. Former national chief of detectives Susno Duadji, sidelined during investigations into his involvement in the Bank Century affair, came out swinging two weeks ago, alleging that corruption was rife at the most senior levels of the police force. He mentioned the tax department's Mr Tambunan by name, saying a part of the money the official allegedly acquired through dodgy tax assessments had been distributed to police, prosecutors and judges investigating his sudden wealth. Senior police - from national chief Bambang Hendarso Danuri down - immediately cried defamation and threatened lawsuits against General Duadji, but in recent days their tone has changed and Mr Tambunan has become a wanted man. He had originally fled to Singapore after escaping charges on an investigation into the origin of the relatively paltry sum of 395 million rupiah held in 23 separate bank accounts, apparently after investigators were bribed to produce a favourable result. However, as the national news magazine Tempo pointed out, Mr Tambunan's escape was "coincidentally" pulled off just hours before police put him on an immigration watch-list and shortly after he met with members of the President's hand-picked Legal Mafia Eradication Unit, established in the wake of last year's Bank Century affair. A member of the unit, Australia-educated lawyer and palace legal adviser Denny Indriyana, admitted the tax scandal almost certainly involved all levels of the police and judiciary. He conceded the affair was likely to discourage Indonesians from paying taxes, a key plank of the finance ministry reform being overseen by Dr Indrawati. Having dragged the taxpayer base from a few million to 16 million in the past few years, Dr Indrawati told a conference on Friday she hoped to have "20 to 25 million taxpayers in the next two to three years". Economist Dradjad Wibowo warned that the latest scandal was "just the tip of an iceberg". Related Coverage a.. Hot topics on SBY's agenda The Australian, 7 Mar 2010 b.. SBY takes bold step The Australian, 5 Mar 2010 c.. Bailout vote crisis for SBY The Australian, 4 Mar 2010 d.. Indonesia coalition rocked by split The Australian, 3 Mar 2010 e.. Going cheap in Jakarta: an unborn child The Australian, 19 Feb 2010
