Google’s Jakarta office was raided by Indonesian authorities after they warned the company for refusing a tax audit.
Officers visited Google’s office in central Jakarta “many times” over the past two weeks to collect data and repeatedly sought meetings with senior company officials, Muhammad Haniv, the head of special taxpayers at the Indonesian Ministry of Finance, said in a telephone interview on Thursday.
“Everyone must comply, whoever they may be,” Haniv said.
“If you refuse to be audited, then we will keep chasing you,” Haniv added.
The government had earlier written to the company warning it for refusing a tax audit, which can result in criminal punishment, he said.
Indonesian President Joko Widodo’s government is following in the footsteps of European authorities in pushing Google to pay more taxes, as it steps up efforts to earn more revenue from Internet companies. He is under pressure to do so, as this year’s state revenue is set to suffer an estimated 218 trillion rupiah (US$16.75 billion) shortfall, while earnings from a tax amnesty program are set to miss his target.
Indonesia has been asking Internet companies to set up permanent local entities for tax purposes since as early as April.
It is also promising lower rates compared with the 30 percent corporate income tax and 25 percent value-added tax that would otherwise apply to Google’s sales of advertisements to local companies, Haniv said.
Google has “paid all applicable taxes in Indonesia,” Google spokesman Taj Meadows said by e-mail, adding that the company is cooperating with the government.
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