This afternoon we continue our investigation to one of TBI’s dirtiest little secrets: tax evasion on a massive scale. In the first two parts of this investigation, we looked how TBI had ripped off the Indonesian government and people by paying only $40 tax on $69,700 revenue at Menara Kuningan in October 2011. Its income tax bill alone should have been $4200, so we can say with confidence that TBI paid 1 cent in the dollar of its income tax obligations. How on Earth do they get away with it if they aren’t up to their necks in sleaze and corruption? No explanation has been forthcoming.
Was October 2011 a freak month perhaps? Was this month just one of their frequent ‘errors’ or ‘salah inputs’ (wrong inputs)? This morning I thought I would investigate and happily the September 2011 Income Statement was still in Cam’s old email account as well. I have printed it as Screen Dump #19 for TBI stakeholders and competitors to peruse. Sadly but predictably, it presents the same picture of gross tax avoidance. Let’s just look at some of the important figures- the overall picture is of criminal irresponsibility and fraud.
How much profits did TBI Menara Kuningan achieve in September 2011? It made just a little shy of Rp 80.000.000 ($8400). (This figure was achieved despite gouging for non-existent management services from USG- these mysterious deductions will be explored in a later post). And how much corporate tax did TBI pay on these profits? Not one cent. Incredible as it seems, they didn’t pay a single cent or rupiah of tax in that month: it is there in black and white. Based on a corporate tax rate of 25%, this means that they cheated the Indonesian government out of Rp 19.875.000 in corporate tax.
This is a piddling amount, however, in comparison with how much Reza Suriansha and his team stole from the coffers of the Indonesian government in terms of income tax. Teacher salaries came to Rp 171.000.000, which means that according to Band II of the Indonesian income tax code, TBI should have paid just over Rp 25.000.000 in income tax. This amounts to some $2700 in income tax. This figure sounds right to me. The international school I worked at in 2006-2007 was a stickler for paying the right income tax and they deducted around $300 a month from my salary, which was about 15% of the total. In contrast, TBI did not pay one cent of income tax in September 2011 either.
In conclusion, TBI did not pay any income or corporate tax whatsoever in September 2011, despite the fact it had around $60,000 in income. In September and October 2011, TBI Kuningan paid only $40 in income tax when it should have paid $6700 in income tax to the Tax Department. Over the same two months it paid virtually no corporate tax, when it was liable to pay around $4000 corporate tax (and this on profits greatly whittled away by unexplained consultancy fees). Therefore, we have discovered over $10,000 in tax evasion at a single school over a two month period. These people clearly have a lot to hide and a lot of financial incentive to tell lies about whistle blowers.