The Corruption Eradication Commission (KPK) has uncovered alleged state losses of approximately Rp59 billion (approximately US$3.5 million) related to the tax administration of PT Wanatiara Persada (WP), a nickel mining company operating on Obi Island, South Halmahera, North Maluku. This figure emerged after the company’s land and building tax (PBB) was allegedly unfairly reduced.
Asep Guntur Rahayu, Acting Deputy for Enforcement and Executive of the Corruption Eradication Commission (KPK), said that initially, taxpayers had a PBB obligation of around IDR 75 billion for the 2023 tax year. Later, the value changed drastically to only IDR 15.7 billion.
“The value dropped by Rp59.3 billion, or around 80% of the initial figure. As a result, state revenues have decreased significantly,” he said, as quoted by Tempo on January 11, 2025.
The findings emerged when the Corruption Eradication Commission (KPK) conducted a sting operation on suspicion of bribery at the North Jakarta Tax Service Office (KKP) on January 9-10, 2026. In the operation, the anti-corruption commission arrested eight people, five as suspects.
The three suspects are tax officials who accepted bribes: Dwi Budi, Head of the North Jakarta Medium Tax Office; Agus Syaifudin (AGS), Head of the Supervision and Consultation Section; and Askob Bahtiar, an assessment team member at the North Jakarta Medium Tax Office.
They are suspected of violating Article 12 letter a or b or Article 12B of Law No. 31/1999 concerning the Eradication of Criminal Acts of Corruption, as amended by Law No. 20/2001, in conjunction with Article 606 paragraph (2) of Law No. 1/2026 concerning Criminal Adjustments in conjunction with Article 20 of Law No. 1/2023 of the Criminal Code.
The other two were bribe givers, namely Abdul Kadim Sahbudin, the company’s tax consultant, and Edy Yulianto, the taxpayer’s staff member.
Both are subject to Article 5 paragraph (1) letter a or b or Article 13 of Law No. 31/1999 as amended by Law No. 20/2001 in conjunction with Article 20 of Law No. 1/2023 of the Criminal Code.
Most recently, the Corruption Eradication Committee (KPK) questioned several additional witnesses and two taxpayer accounting staff on February 24, 2026, at the KPK Building.
The Corruption Eradication Committee (KPK) also confiscated a number of pieces of evidence in the operation, totaling Rp6.38 billion, consisting of Rp794 million in cash, Sin$165,000, equivalent to Rp2.16 billion, and 1.3 kilograms of precious metals, valued at Rp3.42 billion.
The Corruption Eradication Committee (KPK) has not ruled out expanding its investigation to North Maluku, Wanatiara Persada’s operational area, if there are indications of other corruption, including those related to mining permits.
The North Maluku government has expressed support for the Corruption Eradication Commission (KPK)’s efforts to investigate alleged bribery involving the company. North Maluku Governor Sherly Tjoanda stated that the process is a step that must be respected.
“As governor and stakeholders in this province, we are ready to cooperate with the Corruption Eradication Commission (KPK) if necessary, while maintaining a conducive investment climate,” he said, quoting Tempo.
Mongabay sent confirmation interviews regarding the bribery case to the company via email on January 22 and 28, 2026. Three emails on the company’s website failed to deliver or to find email addresses. Two telephone contacts listed on the company’s website could not be reached.
“all in” Scheme
The case was detected between September and December 2025. At that time, the taxpayer reported their PBB (land tax) obligations for the 2023 tax period. The North Jakarta Medium Tax Office (KPP Madya) audit team then conducted an investigation to determine potential PBB underpayments. They found a potential underpayment of approximately Rp75 billion.
The company then filed several objections regarding the potential underpayment. In the process, AGS, as Head of the Supervision and Consultation Section at the North Jakarta Medium Tax Office (KPP Madya), requested that the company pay Rp 23 billion in taxes ” all in .”
” All in ” means that of the Rp23 billion figure, Rp8 billion is for AGS fees and is distributed to parties within the Directorate General of Taxes,” said Asep Guntur Rahayu, Acting Deputy for Enforcement and Execution at the Corruption Eradication Commission (KPK), as quoted by the BBC .
The taxpayer objected to the request and only agreed to pay a fee of IDR 4 billion. This figure was agreed upon. In December 2025, the audit team issued an audit result notification letter (SPHP) with the taxpayer paying IDR 15.7 billion in taxes.
Asep said the value dropped by IDR 59.3 billion, or 80% of the initial value, resulting in a significant reduction in state revenue.
To fulfill the fee request from AGS, WP disbursed funds through a fictitious financial consulting service contract scheme, with PT NBK, owned by ABD, serving as the company’s tax consultant.
NBK then disbursed Rp4 billion in commitment fees, which were subsequently converted into Singapore dollars. ADB then handed the funds over to AGS and ASB, the North Jakarta Medium Tax Office (KPP Madya) assessment team, at several locations in Greater Jakarta (Jabodetabek).
From the funds received, AGS and ASB distributed the funds to several employees at the Directorate General of Taxes and to other parties in January 2026. The Rp4 billion was in foreign currency and then divided up.
The tip of the iceberg
Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, assessed that the practice of tax bribery in the mining sector is not merely an administrative violation but a systemic crime, illustrating how state money can “leak” amid the massive downstreaming of nickel.
“This is a true portrait of illicit financial flows in the extractive industry. How is it possible to magically lower taxes by up to 80% through fictitious contracts and undercover negotiations?” he said in a press release on January 13, 2026.
This practice, said Aryanto, proves that the current nickel industry is still far from the spirit of maximizing people’s prosperity and has instead become a rent-seeking field for a handful of elites.
WP is a foreign investment company (PMA) specializing in nickel mining, processing, and refining. The company manages a 1,725.54-hectare concession on Obi Island.
Based on Mineral One data from the Ministry of Energy and Mineral Resources (KESDM), the share ownership structure of WP Mining Metallurgy Ltd is 60% held by a Hong Kong-based entity and 40% domestic.
According to Aryanto, this type of corporate structure creates ample room for fictitious contracting and tax evasion. The KPK’s findings, he said, are merely a stepping stone to uncovering a larger fiscal leak.
“Fictitious contracts are often used to conceal transactions between corporate entities, which ultimately affect the calculation basis for various other types of taxes,” he said.
Foreign-invested companies, such as taxpayers, that export should be subject to the 1.5% Income Tax on the export value. If export values are manipulated, the potential for state revenue leakage occurs not only in the property tax (PBB) but also in corporate income tax, export income tax, and VAT.
Tax manipulation of up to 80% through fictitious contracts, he said, is not just the behavior of individuals, but evidence of the fragility of the fiscal oversight system in the extractive sector.
“We suspect that the Rp59.3 billion state loss is just the tip of the iceberg of potential tax leaks, including corporate income tax and export income tax, which may have been manipulated through transfer pricing schemes .”
Recurring corruption
Gita Ayu Atikah, a researcher at Transparency International Indonesia (TII), said the uncovered corruption schemes, ranging from the role of tax consultant intermediaries to the alleged use of fictitious consulting services, demonstrate a pattern that frequently emerges in the supervision of the extractive sector.
“Patterns such as tax negotiations, fiscal obligation manipulation, fictitious contracts or invoices, and the use of professional brokers are recurring risk patterns, especially in high-value and complex industries like nickel,” he told Mongabay.
TII noted that the nickel industry has a long and complex value chain, spanning mining, logistics, and smelting. The numerous supporting service transactions, along with discretionary authority in the audit process and the existence of taxes, create opportunities for negotiations outside of formal procedures.
“So this case is more appropriately understood as part of the fiscal corruption ecosystem, not just an individual deviation,” he said.
Gita believes the extreme reduction in the PBB value reflects a failure of state oversight. In a healthy system, she said, such a large fiscal correction should automatically be categorized as a high-risk anomaly and trigger multiple audits.
“This fact can be passed to show the failure of an effective early warning system, audit trail, and internal oversight,” he said.
He also highlighted the significant scope for individual discretion in the tax audit process. Without strong transparency and accountability, this space opens opportunities for conflicts of interest, moral hazard, or abuse of authority.
On the other hand, oversight of the mining sector remains fragmented. Data on permits, actual production, sales, and fiscal obligations have not been consistently integrated across agencies, including the Directorate General of Taxes and the Ministry of Energy and Mineral Resources.
“This fragmentation of oversight across institutions creates structural negligence, allowing manipulation of fiscal obligations to occur without early detection and adequate corrective mechanisms,” he said.
Need to investigate corporate crimes
This case also opens opportunities for further investigation into the corporate structure and beneficial ownership (BO), especially since the taxpayer is a foreign investment company (PMA).
“In extractive sector practices, tax corruption is often a corporate business decision to secure profits, not simply an individual initiative.” ,”
He warned that if law enforcement stops only at intermediaries or officials who receive bribes, the key actors behind the corporate structure could escape.
The main obstacles, he said, lie in layered ownership structures, the use of nominees, and the use of shell companies across various jurisdictions. Cross-border data exchange remains limited, and domestic BO data is not yet optimal for law enforcement.
TII is urging the government to strengthen BO transparency in the nickel sector. This can be achieved by requiring verified beneficial-owner reporting and integrating this data with information on mining permits, taxation, exports, and financial transactions.
Julfikar Sangaji, a dynamic figure in the North Maluku Mining Advocacy Network (Jatam), added that this case must be investigated as a corporate crime because the entire series of events is suspected of benefiting a nickel mining company.
“The series of facts revealed indicates that this case potentially contains elements of systematic and organized corporate crime. The taxpayer is the primary beneficiary,” he said in a press release last January.
He assessed that the use of company funds, employee involvement, and the aim of benefiting the corporation were strong indicators of corporate criminal liability.
“Based on the parameters of corporate criminal liability in Indonesian criminal law, the taxpayer’s actions can be qualified as fulfilling the initial indicators of corporate criminal liability,” explained Julfikar.
The indicators refer to the Corruption Eradication Law and the new Criminal Code (KUHP), as well as Supreme Court Regulation Number 13/2016, which creates space for the criminalization of corporations.
He urged the Corruption Eradication Commission (KPK) and the Attorney General’s Office to implement corporate criminal liability and investigate the beneficial owners of companies. The Supreme Court must enforce corporate crime regulations to prosecute companies as legal entities.
Call for an environmental audit
In addition to the fiscal aspect, Jatam North Maluku also highlighted WP’s environmental track record on Obi Island, South Halmahera, North Maluku.
In November 2023, a dam to retain runoff in the company’s mining area collapsed, polluting the surrounding waters, including the pearl oyster cultivation area.
These various cases should be the entry point for a comprehensive audit on both the tax and environmental sides.
Without action against the corporation and an evaluation of business permits, he said, this case risks ending up as an individual scandal, rather than an improvement in nickel mining governance.
PWYP also called on the government to conduct a comprehensive tax audit of all nickel companies and an independent environmental audit of Obi Island.
This institution also asked the government to be brave enough to evaluate and even revoke the permits of mining businesses that have been proven to have committed fiscal violations and caused environmental damage simultaneously.
“The state must not be defeated by corporations that rob the people of their fiscal rights. Nickel governance reform must prioritize socio-ecological justice, not just economic growth figures,” said Aryanto.
If fiscal corruption practices like this are allowed to continue, Gita said, the biggest risk is leakage of state revenue and the collapse of the legitimacy of the nickel downstreaming agenda within the framework of the energy transition.
“The state loses fiscal space to finance public policies and energy transition investments, while distortions in competition create negative incentives for law-abiding actors.”
Source: Mongabay