PT BANK MANDIRI PERSERO AND SUBSIDIARIES
Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001
Expressed in millions of Rupiah, unless otherwise stated
-
78
-
28. TAXATION Continued c. Corporate income tax expense - current
The reconciliation between profit before corporate income tax as shown in the statements of profit and loss and income tax computations and the related income tax expense for Bank Mandiri and its
Subsidiaries is as follows:
2002 2001
Consolidated profit before corporate income tax expense and minority
interests 5,809,970
3,850,438 Loss before corporate income tax of subsidiaries
36,897 206
Profit before corporate income tax expense and minority interest - Bank Mandiri only
5,773,073 3,850,232
Adddeduct permanent differences: Non-taxable
incomenon-deductible expenses
141,205 1,535,615
Non-deductible write off of loansnon-taxable adjustment on provision for loan losses
6,292,921 8,532,668
Non-deductible provisionnon-taxable adjustment on provision for losses on earning assets other than loans
181,188 306,102
Non-deductible provisionnon-taxable adjustment on provision for estimated losses on commitments and contingencies
423,723 187,566
Non-taxable Incomenon-deductible loss on investments in mutual funds
- 8,054
Non-taxable gain on investments in shares -
32,727 Others
213,152 566,064
Adddeduct temporary differences: Allowable tax depreciation underover
financial statement
depreciation 205,910
473,600 Financial statement provision for personnel
expenses over under allowable tax provision 7,577
314,925 Financial statement provision for losses on
earning assets other than loans underover allowable tax provision
1,816,005 983,247
Financial statement provision for loans losses underover allowable tax provision
1,111,464 5,097,050
Financial statement provision for losses on commitments and contingencies underover
allowable tax provision 4,073,259
1,725,846 Financial statement provision for losses arising
from legal cases underover allowable tax provision 89,217
155,826 Gain on increase in market value of marketable
securities and Government Bonds 1,433,001
- Others
- 632,011
Estimated tax losstaxable income 6,370,979
4,404,391 Less: Utilization of tax loss carry forwards
- 4,404,391
Corporate income tax expense - current Bank only -
-
PT BANK MANDIRI PERSERO AND SUBSIDIARIES
Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001
Expressed in millions of Rupiah, unless otherwise stated
-
79
-
28. TAXATION Continued c. Corporate income tax expense - current continued
The tax reconciliations for the years ended December 31, 2002 and 2001 were as reported in the Bank’s tax returns.
2002 2001
Subsidiaries: Estimated taxable income
2,747 -
Estimated corporate income tax expense - current 824
- Less: Income tax payments
- -
Corporate income tax payable 824
-
Under the Indonesian taxation laws, Bank Mandiri and its Subsidiaries submit tax returns on the basis of self-assessment. The tax authorities may assess or amend taxes within 10 years after the date of
the tax filings 5 years for tax years prior to 1995.
Tax Assesment On July 5, 2002, the Bank has received tax assessment letter SKPKB No. 000282060005102
dated July 5, 2002 for its 2000 corporate income tax. The assessment stated that the Bank has an underpayment of corporate income tax including interest and penalties totaling Rp2,248,387. The
underpayment is due to fiscal positive corrections of its reported taxable income amounting to Rp15,806,521 which is comprised of provision for loan losses due to the transfer of bad loans to
IBRA amounting to Rp12,242,846, provision for loan losses over allowable tax provision of Rp3,087,357 and fixed assets depreciation expense of Rp476,318.
The Bank agreed in part to the tax auditors’ fiscal corrections on provision for loan losses over allowable tax provision of Rp3,087,357 and correction of the fixed assets depreciation of
Rp476,318. These agreed corrections will however not result in taxable income due to the available tax loss carryforwards. In respect of the tax auditors’ fiscal correction on provision for loan losses
due to the transfer of bad loans to IBRA amounting to Rp12,242,846 comprised of Rp8,505,300 transferred to IBRA in 2000 and Rp3,737,546 transferred in 2001, the Bank maintains that its
claims for tax deductions for such losses is legally appropriate.
The Bank is contesting the assessment and sent a letter for reconsideration “Peninjauan Kembali” No. DIR.CIF2152002 dated August 2, 2002 requesting the tax authorities to reassess the results of
the tax examination. The Director of Tax Examination, Investigation and Collection, through his letter No. S-352PJ.7332002 dated August 21, 2002, rejected the Bank’s letter for reconsideration
and requested the Bank file a Letter of Objection. Bank Mandiri sent a Letter of Objection No. DIR.CIF2582002 on September 26, 2002.
On September 30, 2002 the Directorate General of Taxes issued letter of decision No. KEP- 406WPJ.07BD.032002 rejecting all of the Bank’s objections. Based on the Indonesian tax law,
taxpayers can only raise applications for appeals to the tax court against tax decisions within a period of 3 three months from the date of the decision. In addition, the appeal letter may be
submitted only if the taxpayer has paid 50 of the total tax assessment to the State Treasury.
