Failed to pay tax, Google may be blocked

JAKARTA. The government continues forcing Google to settle its tax debts. In the next year, Directorate General of Taxation will determine the further step for the next year. Meanwhile, Ministry of Communication and Information has also opened a chance to block Google.

The further step will be carried out to determine the tax calculation base. “There will be further discussion on the details of the calculation,” said Minister of Finance Sri Mulyani, Thursday (22/12). According to Sri Mulyani, the further step is not a negotiation process, but a part of tax collection process.

The tax calculation base needs to be determined and verified, since Directorate General of Taxation and Google have different data on the tax base. The further step will be carried out, since as of to date the government and Google failed to reach agreement.

Starting from next year, Directorate General of Taxation will investigate the preliminary evidence on the case of Google’s tax.

The verification is essential to legitimate the data, which are the tax calculation base. The verification also can describe the transactions of Google in Indonesia, including in terms of credible value. Sri is also optimistic that Google has understood the case of tax arrears. Therefore, government can calculate the value, which has to be settled by Google.

"If there is the added value arising from their activities in Indonesia, Indonesia needs to get its due. That's the principle. I think they respect that principle. We only need to calculate how much value generated from Indonesia, and how much are the Indonesia’s rights,” Sri Mulyani stated.

Previously, Directorate General of Taxation Ken Dwijugiasteadi said that the tax authority will not give special treatment to foreign tax delinquents. Therefore, the government may impose sanctions, including taking hostage or imprisonment.

Meanwhile, Minister of Communication and Information Rudiantara said that the ministry will take any step to force Google to settle its debts in Indonesia, including the blockage. “The blockage is the least step. But we also have to consider the public interests,” he said, Thursday (22/12).

Let alone, according to Rudiantara, Google is not a search engine, but also the facilities of e-mail and others. “This has to be discussed with the stakeholders,” he said. In terms of the tax arrears, Rudiantara said that Ministry of Finance has full authority to settle this matter. In this case, Ministry of Communication and Information will support any decision made by fiscal authority.

Executive Director of Indonesia ICT Institute Heru Setiadi said that aside of settling the Google’s tax arrears, the government also needs to develop the local search engine. “Indonesia has to think of developing local search engine and youtube,” he said.

He also suggests the government to learn how other countries pursue Google’s tax. Some European countries, such as Great Britain pressured Google when the local start-ups were ready.

Therefore, when problem occurs, the government can replace the roles of Google and find win-win solutions. “This is like a war. If Google is blocked, the government may be facing its citizens,” he said. According to him, if government wants, Indonesia can set up local provider to replace Google.

(Muhammad Farid/Translator)