Índices De Gestión

The Summary of the Case

The Supreme Court Decision Number 2239K/Pid.Sus/2012 was the final and binding decision related to tax crime which involved Suwir Laut. Suwir Laut, who was the defendant in this case was the tax manager of the Asian Agri Group, an Indonesian holding company, which became one of Asian largest palm oil producers. As a tax manager, Suwir Laut’s primary

duty was to make the company’s consolidated financial statements and submit the company’s tax report. Between 2002 and 2005 Suwir Laut submitted false tax reports by reducing the profit of the company to avoid the tax of the 14 companies belonging to the Asian Agri Group. The act of Suwir Laut caused a state loss of around 1,25 trillion Rupiah (equal to 78,125,000 Euro). Suwir Laut was charged by the prosecutor for the violation of Article 39, Paragraph 1, Letter c, Law Number 6, Year 1983 regarding Taxation General Provisions and Procedures as already amended by Law Number 16 Year 2000. This article stipulates:

“Whosoever intentionally files a tax return and/or the information provided is false or incomplete; thus causing losses to the state revenues, shall be punished by imprisonment for a period not exceeding 6 year and shall be fined an amount not exceeding 4 times the amount of unpaid or underpaid tax”

For the misconduct, the prosecutor requested that the Court impose a three year imprisonment followed by a fine of Rp. 5,000,000,000 (five billion Rupiah)346 _{on Suwir Laut.}

The Central Jakarta District Court decided to reject the prosecutor’s bill of indictment against Suwir Laut because the criminal charge to the defendant was premature.347 The opinion of the District Court was that in tax cases, the administrative law should be taken into account first before prosecuting the offender in criminal cases. Thus, the criminal prosecution should be the last resort (ultimum remidium) to deal with tax evasion.348 Furthermore, the Jakarta High Court had the same opinion when the prosecutor appealed the District Court decision. They also declared that the prosecution of Suwir Laut was premature.349

346 _{Equal to approximately Euro 333,000 (1 Euro equal to 15,000 Rupiah).}

347 _{The decision to reject the bill of indictment in the final process of the trial by the District Court because the}

prosecution was premature lead to controversy since the Indonesian criminal legal system only recognizes three types of the final court decisions namely conviction, acquittal and dismissal of the charge. The rejection of the bill of the indictment actually should be decided in the early beginning of the trial by an interlocutory decision. See the explanation of the types of the final decision by the Indonesian criminal court in the sub chapter 3.1.2.

348 _{See the Central Jakarta District Court Number 234/Pid.B/2011/PN.JKT.PST.} 349 _{See Jakarta High Court Decision Number 241/Pid.2012/PT.DKI.}

However, the Indonesian Supreme Court had a different opinion when examining the case based on the cassation of the prosecutor. The opinion of the Supreme Court was that the prosecution of Suwir Laut for falsifying tax reports to avoid the tax payment was not premature because the defendant did not show the good will to complete their obligation when the tax office investigators investigated the case. The court stated that the defendant had intentionally falsified the data, which was contrary to the Self-Assessment tax collection system whereby the tax subject has the right to calculate, pay, and report its own taxes. It was proven that the defendant filed bogus company liabilities data over four years for 14 companies, enabling the corporations to pay little to no tax. The Supreme Court decided that Suwir Laut, the tax manager of the group, was legally and convincingly guilty for committing tax crimes by submitting false or misleading notifications and/or information about the corporation’s tax reports to avoid tax payment. The Supreme Court imposed a two year imprisonment sentence with three years’ probation along with a special condition that Asian Agri Group must pay a fine of 2.5 trillion Rupiah (approximately equal to 156,250,000 Euro). That fine was two times the tax that should have been paid by the Asian Agri Group between the periods of 2002 to 2005.

The Way the Legal Enforcers Implemented Corporate Criminal Liability in the Suwir Laut Case

The Suwir Laut case is an example of the contemporary position of the Indonesian Supreme Court that creates an opportunity to sanction corporations even though it is not the defendant of the case. In the Suwir Laut case, the Supreme Court believed that the conduct of

Suwir Laut as tax manager of the Asian Agri Group was the personification of the corporation, and the corporation became the party that benefited the most from the misconduct. Based on those facts, the Supreme Court decided to only impose a probation sanction on Suwir Laut and sanctioned the corporation to compensate the unpaid tax. The imposition of fine from the Supreme Court to corporation was not based on the request of the prosecutor. In their bill of indictment, the prosecutor did not request the court impose a fine on the corporation. The prosecutor only requested a fine for Suwir Laut, a request that the Supreme Court satisfied.

The court stated the reasons for imposing the fine on the corporation.350 The court realized that the corporation was not formally the defendant in the case. However, the Court found that the misconduct of Suwir Laut as tax manager was based on the will of the corporation and

benefited the corporation. Therefore, it is unfair if only Suwir Laut should be criminally liable. In the view of the Supreme Court, in that case, individual liability should be simultaneously implemented with corporate liability based on the doctrine of respondeat superior or vicarious liability. The Supreme Court argued that the doctrine creates the possibility to impose criminal liability on corporations based on the misconduct of its employee. The Supreme Court said this theory is accepted in the modern criminal law system. Moreover, the court also gave an argument based on the development of the criminal liability of corporations in the Netherlands. The court said that tax law in the Netherlands has recognized the criminal liability of corporations. Since taxes have been reliable for state budget revenue, convicting corporations is in the practical interest of maximizing the enforcement of tax law. Therefore, it is important for Indonesia to consider to adopt the Dutch way. However, the court did not explain whether it is possible in the Netherlands to sanction a corporation, when the corporation is not the defendant within the case.

The argument used by the court to sanction the corporation is groundless. In Tax Law, corporations are recognized as legal subjects, just as natural persons. That recognition means that the corporation has the same rights and obligations as a natural person, including the right for a fair trial in criminal cases. The Asian Agri has the right to defend itself in the court before being sanctioned. In this case, Asian Agri did not have any opportunity to defend itself. In the District Court and the High Court, the decision only examined Suwir Laut as the defendant but suddenly, in final decision by Supreme Court, the corporation was sanctioned by the court. The corporation did not have any right to challenge the decision, because the corporation was not the party of the case who could file judicial review against the decision of the Supreme Court. So, the Asian Agri cannot do anything except comply with the Supreme Court’s decision by paying the fine.351