Illegal financial flows from export-import activities during 2012-2021 are estimated to reach IDR 74 trillion. What caused it?
Jakarta - Research institute The PRAKARSA find potential dark financial flows from export and import activities of fishery commodities and coal which lead to loss of state revenue. Its value reached US$ 5,58 billion or around Rp. 74 trillion during the 2012-2021 period.
Researcher The PRAKARSA, Rizky Deco Praha, said his team compared data on exports and imports of fishery products and Indonesian coal during the 2012-2021 period. Using information from the UN Comtrade website which is officially managed by the United Nations, they found differences in records of trade values between Indonesia and its partner countries, known as misinvoicing. "This difference has been adjusted for logistics and insurance costs of around 10 percent," he said yesterday.
In the fisheries sector, Deco said the calculation was carried out on products coded 03 in the UN Comtrade database. From trading research of the last 10 years, he finds misinvoicing exports worth US$ 7,34 billion or around Rp. 97,3 trillion as well misinvoicing imports worth US$ 2,3 billion or more or less Rp. 30,5 trillion. This trade leak triggered a potential embezzlement value of US$ 9,7 billion or equivalent to Rp. 128,6 trillion.
According to Deco, misinvoicing exports were found in crustacean commodities with the destination country being the United States. Meanwhile, misinvoicing imports occurred in mackerel commodity with the destination country of China.
As for the coal sector, there was a difference in exports worth US$ 122,9 billion or around Rp. 1.630 trillion and misinvoicing imports worth US$ 12,5 billion, equivalent to Rp. 165,8 trillion. In the last 10 years, there has been an embezzlement of US$ 133,5 billion or around Rp. 1.770 trillion.
Deco said the findings indicated that there was leakage from the export side of Janis bituminous coal products and coal other than anthracite to India and South Korea. Meanwhile, during imports, there was leakage of bituminous products from the Netherlands and Australia.
Two Misinvoicing Scenarios
According to Deco, there are two scenarios misinvoicing, yaitu under-invoicing and over-invoicing. First, when imports recorded by importers are less than exports recorded by exporters. This condition is interpreted as import under-invoicing or export over-invoicing or both. Likewise with the second scenario, in which import records are greater than export records. Then this condition is indicated as export under-invoicing or import over-invoicingor both.
The PRAKARSA process the data with the method gross excluding reversals developed by Global Financial Integrity (GFI). Meanwhile, the amount of potential state revenue is calculated from tax and non-tax revenues in the form of income tax (PPh) Article 22, PPh Article 21, value added tax (VAT), and royalties.
Tax revenue is calculated based on the estimated value in the equation, referring to the Quraeshi and Mahmood study published in 2016. Meanwhile, the calculation of the potential loss of non-tax state revenue refers to GFI research by estimating royalty revenue.
Causes of Export-Import Misinvoicing
Deco explained, misinvoicing can occur due to several factors. One of them is as an effort to avoid taxes or customs to increase profits. When this happens, the government suffers a loss because the potential revenue should be utilized for the benefit of the wider community.
According to the Head of the Strategic Intelligence Sub-Directorate of the Directorate General of Taxes, Bai Nurhidayat, illicit financial flows, including those related to export-import activities, have entered the government's radar. The main problem of embezzlement boils down to two sides. First, compliance of exporters and importers by submitting actual data. In addition, embezzlement also occurs when exporters do not park their export earnings domestically.
In the context of coal, Bai noted that illegal transactions often occur because domestic mining exporters often do not deal directly with end consumers. “Ade trader out of interest," he said. For example, exporters usually target under-invoicing. Meanwhile, importers hope over-invoicing. Coupled with the presence of countries tax haven.
In the fisheries sector, Bai said the potential for embezzlement could occur because export and import producers had not provided complete information. In addition, fishermen's understanding of the obligation to set aside their profits for the state through taxes is still low.
Manager of DDTC Fiscal Research & Advisory, Denny Vissaro, stated that the potential loss of state revenue due to illicit financial flows could be greater than The PRAKARSA. "This has been going on for a long time," he said. Apart from that, there are other modes that trigger this practice apart from trading data leaks.
Denny stated that embezzlement could occur by setting prices within a certain range to reduce the tax burden so that income could be higher. Price fixing ultimately makes the company's profit on paper smaller. As a result, state revenue is not optimal
Author: Jihan Ristiyanti | Vindry Florentine
Sumber: newspapers.tempo.co
