Indonesia

Google is expected to reach a tax settlement with the Indonesian government in the next few weeks, people familiar with the matter told Reuters. Under the proposed settlement, Google will pay back taxes and fines, and the search giant will have to agree to a new calculation of profits made in the country, said one of the people, who declined to be named as the information was not public.

Rolls-Royce plc, Britain’s leading manufacturing multinational, hired a network of agents to help it land lucrative contracts in at least 12 different countries around the world, sometimes allegedly using bribe.

Last month, the US Securities and Exchange Commission (SEC) passed a rule that will require resource extraction issuers to disclose the payments that they make to governments for the commercial development of oil, gas and minerals resources. This is a significant step forward also for Indonesia as several companies listed in the US operate in the country and the data of the payments that these companies make to the Indonesian government will now become available. Similar laws already exist in the EU, Canada and Norway. The number of oil, gas and mining companies in the US is huge and, on top of that, they are classified as big extractive companies as they operate around the globe with significant capital.

According to a 2014 report from Global Financial Integrity entitled “Illicit Financial Flows from Developing Countries: 2003- 2012”, Indonesia ranks seventh of countries with the largest illicit Financial Flows (IFF). In 2014 IFF in Indonesia is estimated at a total of IDR 227.75 trillion ($20 billion), the mining sector contributes IDR 23.89 trillion ($2 billion), mainly derived from trade mis-invoicing. Late 2015 Publish What You Pay Indonesia conducted a study on IFF and tax crime in the mining sector in Indonesia. This is an urgent issue, given the sad reality of Indonesia among the top seven developing countries with highest IFF.

Indonesia ranks seventh in biggest Illicit Financial Flows (IFF) among developing countries for year 2003-2012. While in 2014, IFF in Indonesia in 2014 is estimated reaching IDR 227.75 trillion ($20 billion). Mining sector contributes IDR 23.89 trillion ($2 billion), mainly derived from trade misinvoicing.