Tax Fraud Probe Hits Pulp Giant Toba Pulp Lestari in $125 Million Transfer Pricing Scandal

JAKARTA, Investortrust.id — The Attorney General’s Office (Kejagung) has named two officials from the Finance Ministry’s Directorate General of Taxes as corruption suspects in an alleged Rp 2 trillion ($125.78 million) transfer pricing scheme involving pulp manufacturer PT Toba Pulp Lestari Tbk.

Head of the Legal Information Center Anang Supriatna announced the enforcement action during a press conference at the Junior Attorney General for Special Crimes (Jampidsus) building on Wednesday, Aug. 12, 2026. "Today we have named two suspects with the initials BP and SR," Anang stated.

The high-profile investigation underscores mounting regulatory scrutiny over cross-border transfer pricing practices and tax compliance among Southeast Asia's major resource and manufacturing exporters. The probe highlights severe governance risks for corporate entities utilizing affiliated offshore accounts to misreport commodity grades, signaling aggressive crackdowns on state revenue leakage across the pulp, paper, and forestry sectors.

Director of Investigations Saeful Bahri Siregar confirmed that the formal suspect designations followed investigative order Number 13/F.2/Fd.2/03/2026 issued on March 9, 2026. Investigators have questioned 111 witnesses and seized extensive documentation alongside electronic evidence proving unlawful tax evasion that damaged state finances.

"For state financial losses in this case, the calculation process by the auditing team remains ongoing, and preliminary findings from our investigation estimate temporary losses reaching Rp 2 trillion," Saeful said during the press briefing at the Jampidsus building in Jakarta on Wednesday night, Aug. 12, 2026.

Under-Invoicing and Misclassifying High-Value Exports

Prosecutors revealed that PT Toba Pulp Lestari Tbk—a major Indonesian pulp producer operating in northern Sumatra—executed an under-invoicing scheme on export sales to affiliated entities between 2008 and 2025. The company allegedly reported shipments of high-value dissolving pulp as lower-grade paper pulp, artificially depressing export values and drastically reducing taxable corporate income.

"In order to reduce the product value of PT TPL from its actual value, PT TPL unlawfully reported product sales of pulp with false product classifications to PT Asia Pacific Rayon or its affiliated companies from 2018 to 2025," Saeful explained during the news conference on Wednesday, Aug. 12, 2026.

Tax Supervisors Detained Over Kickbacks

The investigation revealed that PT Toba Pulp Lestari enlisted suspect BP, who served as a tax audit supervisor overseeing the company's tax audits in 2020 and 2023, alongside suspect SR, who supervised tax audits for the firm in 2024. Prosecutors stated that both supervisors purposefully failed to perform their supervisory duties, approving fraudulent examination working papers and audit reports in exchange for financial kickbacks from the company.

Both suspects face charges under Article 603 in conjunction with Article 20 of Law No. 1 of 2023 (Criminal Code) and anti-corruption statutes under Law No. 31 of 1999. Following their designation as suspects, BP and SR were immediately remanded to the Salemba State Prison's Attorney General's Office branch for an initial 20-day detention period starting Aug. 12, 2026.