Indonesia Raids Google’s Jakarta Office for Tax Payment Data

  • Raids conducted ‘many times’ over two weeks: ministry official
  • Govt sent a warning letter to Google for refusing tax audit

Indonesian tax officials raided Google Inc.’s Jakarta office seeking data to back its allegations of unpaid taxes as the government steps up efforts to earn more revenue from internet companies.

Officers visited Google’s office in central Jakarta “many times” in the past two weeks and repeatedly sought meetings with senior company officials, Muhammad Haniv, the head of special taxpayers at the Finance Ministry, said in a phone interview Thursday. The government had earlier sent Google a warning letter for refusing a tax audit, which can result in criminal punishment, he said.

President Joko Widodo’s government is following in the footsteps of European authorities in pushing Google to pay more taxes. He’s under greater pressure to do so as this year’s state revenue is set to suffer an estimated 218 trillion rupiah ($17 billion) shortfall, while earnings from a tax amnesty program are set to miss his target. 

Google has “paid all applicable taxes in Indonesia,” Taj Meadows, a spokesman, said by e-mail, adding the company is cooperating with the government.

Indonesia has been asking internet companies to set up permanent local entities for tax purposes since as early as April. It’s also promising lower rates compared to the 30 percent corporate income tax and 25 percent value-added tax that would otherwise apply to Google’s sales of advertisement to local companies, according to Haniv.

“Everyone must comply, whoever they may be,” Haniv said. “If you refuse to be audited, then we will keep chasing you.”

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