Business urged to shun tax collusion<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
With collusion and corruption between businesses and tax officers
\nshowing little signs of abating, President Susilo Bambang
\nYudhoyono has urged an end to the practice to prevent a high-cost
\neconomy.<\/p>\n
Speaking on Thursday as the keynote speaker of a two-day
\nmeeting of the nation's powerful business lobby group -- the
\nIndonesian Chamber of Commerce and Industry (Kadin), Susilo
\nwarned the businesspeople of severe consequences if they were
\ncaught in a tax fraud case.<\/p>\n
\"There will be no leniency for those who evade their proper
\ntax payments, or act in collusion with tax officers to reduce the
\npayment,\" avowed Susilo, reminding them that the government was
\nnow beginning to focus on efforts to uphold the law and maximize
\nstate revenues.<\/p>\n
To help increase state revenue from taxes, Susilo said that
\ngovernment regulations on taxation would soon be issued, notably
\nthe ones related to efforts to increase the tax base and to
\nreduce corruption.<\/p>\n
\"Our policy is clear; we will increase the tax base and
\ncompliance,\" Susilo said.<\/p>\n
Over the years, the government has been relying heavily on
\nrevenue from taxes to finance the state budget, contributing more
\nthan 70 percent of the total state revenues.<\/p>\n
For this year, tax revenues are estimated to reach Rp 297.5
\ntrillion (US$32.4 billion), up from Rp 239 trillion last year.<\/p>\n
However, tax collection in proportion to population is
\nextremely low and has the potential to increase by as much as 10-
\nfold. Mass leakages in state revenue resulting from the collusion
\nbetween taxpayers, especially businesspeople, and the tax office,
\nis partly to blame for that.<\/p>\n
One of the more common methods used by the tax officers is for
\nthem to offer their \"services\" with taxpayers to manipulate the
\namount of taxes to be paid to the state, in return for a certain
\nunder-the-table fee, which is often far less than the taxpayer
\nactual payment to the state should have been.<\/p>\n
Another practice is that the officials will find a minor
\nclerical error or typo in the tax return documents and \"force\"
\ntaxpayers to pay an under-the-table \"fix-it fee\" by threatening
\nthe taxpayer with severe fines or prison.<\/p>\n
Kadin chairman Mohamad S. Hidayat, while acknowledging that
\nsuch collusion was commonplace, stated that it was the result of
\na weak bureaucracy with various loopholes in the tax regulations.<\/p>\n
\"The business community has not yet seen any improvement in
\nthe bureaucracy during the government's first three months. Even
\nthe new ministers have expressed their concerns to us on how the
\ncurrent bureaucracy is decaying and hard to fix,\" he said.<\/p>\n
The poor performance of government officials often \"forces\"
\nbusinesspeople to seek a \"quick solution\" by handing over some
\ncash to state officials just to get routine things processed.<\/p>\n
Hidayat urged the government to focus on improving
\ntransparency and certainty of tax regulations, boosting tax
\ncompliance and reforming the bureaucracy.<\/p>\n
\"We are committed to, along with the government, tackling this
\nproblem. We have now pledged that it is time for the business
\ncommunity to comply with the taxation regulations and laws, not
\nto avoid them.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/business-urged-to-shun-tax-collusion-1447893297",
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