Attorney General opens investigation into alleged non-payment of taxes by Indosat

16 Jan 2012

The Jakarta Globe reports that the Attorney General’s Office is investigating allegations that the country’s second largest operator by subscribers, PT Indosat, avoided paying ‘certain taxes’ by passing some of its broadband spectrum to a subsidiary. In the case, the office says that the Indonesian Telecommunication Consumer group (KTI) has accused Indosat of avoiding IDR3.8 trillion (USD419.9 million) worth of taxes by giving spectrum to its IM2 unit in 2007. The consumer group argues that rather than use Indosat’s spectrum, the subsidiary should have purchased its own broadband spectrum and paid taxes as a private company, accordingly. The tax rates levied on privately owned firms differ to those applied to public companies – such as Indosat. In its defence, the telco argues that IM2’s 3G broadband service ‘complied with existing laws and regulations’. The investigation is said to be ongoing.