The Finance Ministry’s tax directorate may face a soaring number of tax disputes in 2009 as the number of taxpayers grows rapidly from the last financial year and a new tax law is imposed, the Tax Lawyers Association warned on Thursday.
“In 2008 alone, the tax court had to deal with around 2500 cases,” said Juniver Girsang, chief of the Tax Lawyers Association, predicting that the number of cases was likely to double due to a new tax law which came into effect in January.
Under the new law, taxpayers can challenge in court the tax amount charged to them without handing over any money first. The previous tax law obliged taxpayers to pay 50 percent of the amount assessed by the tax office before they were entitled to challenge the figure in court.
Juniver said that most taxpayers and tax officials did not completely understand tax laws. “Taxpayers usually focus on the tax calculation and are not aware of its legal implications,” he said. “Tax officers also make mistakes that could harm taxpayers.”
He said tax regulations were also far from perfect, and were even sometimes against the law. For example, taxpayers could be sent to jail for not paying tax. Yet, he added, they were also required to pay administrative sanctions for the same tax.
“This is against the legal principal ne bis in idem [not twice for the same], because there are two punishments imposed upon one mistake,” he said.
Anshari Ritonga, an tax law expert, said taxpayers would play a significant role in ensuring tax collection succeeded, because of Indonesia’s self-assessment system.
Indonesian taxpayers pay tax by self assessment which means they list, value and report their taxable wealth by themselves.
“In the case of a tax dispute, taxpayers could turn to tax lawyers to bridge their differences with the tax office,” he said.