With biased presiding judges and structurally outside the judicial system, the tax tribunal has become the subject of controversy, and this needs to be immediately resolved, chief justice Harifin Tumpa says.
Harifin urged Tuesday the government to amend the tax tribunal law as it was basically inconsistent with the current judicial jurisdiction law, and the 1945 constitution.
He said that according to the existing laws, the country’s legal judicial institutions comprised only the Constitutional Court and the Supreme Court which supervises the general courts, religious courts, military courts, and State Administrative Court.
But the tax tribunal, which handles taxpayer’s complaints against the tax office and the customs and excise office, comes not under the Supreme Court jurisdiction but under the Finance Ministry, which also oversees the tax and customs offices.
“Therefore, people may think the tax court is actually not a legal judicial institution. They may even question the validity of its decisions,” said Harifin in a seminar on the tax tribunal.
According to Harifin, there is no clear code of ethics for the tax tribunal judges, opening up room for bias and conflicts of interest.
Indeed, most of the tribunal’s judges are former tax and customs officials selected by the Finance Ministry.
“It is unclear whether the tribunal judges are also bound by the general code of ethics used by other judges,” said Harifin.
“I am not even sure whether the judicial commission [the watchdog for the judges] has the right to discipline the tribunal judges.”
The tax tribunal was established by a 2002 law that converted the Finance Ministry-sanctioned tax dispute agency into a court.
Senior lawyer Sutan Remy Sjahdeini said the nature of the tribunal was entirely different from the judicial system.
He said the judges for the tax court were not required to have law degrees, and that they were chosen by the Finance Ministry with the approval of the Supreme Court.
The technical mechanisms for the tax tribunal follow Supreme Court rules, but its management, administrative and financial affairs were regulated by the Finance Ministry.
“The position of the tax tribunal is so blurred. It should actually be neutral in presiding over a dispute between a taxpayer and the government. However, the court’s links with the government are too strong, “ he said.
Sources at the Finance Ministry said the tax tribunal would best remain under the ministry to help ensure the flow of state revenue.
“If the tribunal were to be put under the Supreme Court, we are concerned there would be a disruption in tax revenue flows into the state coffers because disputes would take too long to settle,” said the source.
Under the tax tribunal law, taxpayers cannot file their complaints with the tribunal unless they have already paid 50 percent of the disputed tax bill to the state.
The government is concerned that if the tribunal comes under the Supreme Court, taxpayers would have reasons to withhold payments until cases were settled, affecting the sustainability of state revenues.
With the current administrative reform at the tax and customs office, the tribunal is facing a more daunting task as tax and customs officials regularly charge taxpayers higher than usual to avoid allegations of collusion with taxpayers.
The officials will then easily pass the taxpayer’s complaints to the tax tribunal for settlement.
Because of such attitudes, appeals and complaints filed with the tribunal jumped by 35 percent last year to 6,430 cases from 4,736 cases in 2007.
Deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Hariyadi Sukamdani said that although the businesses were generally happy with the fast settlements by the tribunal, there was a deep concern over the independence of the judges.
“Most of the judges at this time are former officials from the tax and customs offices. Thus, they will likely take sides with their former colleagues,” said Hariyadi.
“The judges should be neutral and be selected not only by the Supreme Court and the Finance Ministry but also by the taxpayers, such as by Kadin or legal consultants,” he said.
Both Hariyadi and Sutan urged the amendment of not only the tax tribunal law but also the judicial jurisdiction law to consolidate the proper legal position of the tribunal.
“Since taxation affairs are related to administration affairs, the tribunal can be put under the state administrative court,” said Sutan. (mrs)