TBI Tidak Taat Pajak (TBI’s a Tax Cheat) Part 2

               Part 2: TBI’s Income Tax Scams

This evening we continue our investigation into TBI’s shocking record of tax avoidance. A couple of days ago we leaked a copy of the TBI Kuningan Income Statement from October 2011 prepared by Reza Suriansha and his team in Finance. Your current blogger didn’t get a look at this thing until around May 2012 and I was shocked when I first laid eyes on it. I knew TBI kelapa Gading’s owners weren’t paying any tax but I had made the mistake of thinking that TBI Group Schools were less roguish. I knew that Cam had pointed out glaring errors in their financial reporting at times and had received lame apologies like, Maaf Pak, salah input ya?” I knew, that they weren’t paying enough income tax or business tax in a general way but when I realized that they paid a measly $40 on $70,000 revenue, I was amazed at just how much of a tax avoider TBI was. Other people have responded in the same way: it is almost beyond belief they can get away with this stuff. (We will talk about their political friends and coal and palm oil industry links more in the coming weeks and months- this is the likeliest explanation for why they are so exempt.)

In the meantime, let’s look at all the income tax laws which TBI and USG are breaking with such impunity. Here is the table of Indonesian income tax rates, which will give us a guide as to how much income tax TBI should be paying:

Band Annual Income Rate
Tax Free Up to Rp24,000,000 0%
Band I Up to Rp50,000,000 5%
Band II Rp50,000,000 to Rp250,000,000 15%
Band III Rp250,000,000 to Rp500,000,000 25%
Band IV Above Rp500,000,000 30%

Now while office staff are mostly in the tax free band under Indonesian law, TBI teachers and managers mostly fall into Band II, so overall we can assume that TBI should be paying around 15% income tax on teacher and manager salaries, especially at a school like TBI Kuningan where expat salaries start above Rp 14.000.000 per month. So how much is TBI short-changing the Indonesian government? Let’s look at our trusty chart and see!

TBI Menara Kuningan Mencegah Bayar Pajak (TBI Kuningan Avoids Paying Tax)

Referring to Screen Dump #18, we find that TBI Menara Kuningan paid salaries of Rp. 271.000.000 ( or around $28,000 ) in October 2011. Now based on an approximate level of income tax (Band II according to the tax table), TBI should have paid $4200 income tax in that month or around Rp 40.000.000 (40 million rupiah). Instead they paid $40 tax total. This means they paid about 1 cent in every dollar of their income tax obligations. I have never sat down with the regulations before the last couple of days but the extent to which TBI is ripping Indonesia off beggars belief. We will soon look at how on Earth they manage to get away with fraud on this massive scale.

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