Indonesian palm oil giant Asian Agri to pay $205 mn tax fine

Indonesian palm oil giant Asian Agri said Thursday it had agreed to pay a $205 million fine in a case seen as a test of authorities' determination to stop widespread tax evasion. The Supreme Court in 2012 accused a string of Asian Agri's subsidiaries of tax evasion and ordered the company to pay a 2.5 trillion rupiah fine and another 1.26 trillion rupiah in lost state revenues. Tax evasion has long been rampant in graft-ridden Indonesia but authorities have been taking a tougher stance in recent years and have introduced a series of sweeping reforms. Asian Agri, which denies any wrongdoing, had already returned most of the lost taxes but refused to pay the fine. However it finally agreed to pay after authorities recently threatened to seize its assets. "We have made a payment of the fine as an act of good faith, so that we can continue with our operations and ensure the wellbeing of our 25,000 workers and 29,000 farming families," said Supriadi, who goes by one name and is head of an Asian Agri subsidiary. Setia Untung Arimuladi, spokesman for the attorney general's office, said that Asian Agri had paid an initial 720 billion rupiah to the state treasury on Wednesday and would pay the remainder in monthly instalments of 200 billion rupiah. All the fines would be paid by October, he said. Despite agreeing to pay the fine, the company said it would still file a judicial review, the last avenue of appeal after a Supreme Court ruling. The Supreme Court in 2012 accused a former Asian Agri tax manager and the company of "deliberately" failing to file tax forms properly between 2002 and 2005. Asian Agri said it had commissioned an independent audit that found no irregularities in its tax payments. The company is a subsidiary of Singapore-based conglomerate Royal Golden Eagle (RGE), which is owned by Indonesian tycoon Sukanto Tanoto.