Govt fails to finish drafting tax laws<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The directorate general of taxation has not been able to
\nsubmit drafts on the amendment of three tax laws to the House of
\nRepresentatives as scheduled in February, according to a senior
\nofficial.<\/p>\n
Secretary of the tax reform team Robert Pakhpahan told The
\nJakarta Post on Monday the drafts had yet to be approved by the
\nstate secretary, a key requirement before being discussed by
\nother related ministries.<\/p>\n
He said that after completing the discussion with the
\nministries, the drafts would have to be approved first by the
\nPresident before they were submitted to the House of
\nRepresentatives for deliberation.<\/p>\n
\"We are still awaiting approval from the state secretary. We
\nhave no idea when the drafts can be completed,\" said Robert, who
\nis also an acting director for value added tax and luxury tax at
\nthe tax directorate.<\/p>\n
The directorate general of taxation has drafted amendments to
\nthree tax laws: Law No. 16\/2000 on general taxation arrangements
\nand procedures, Law No. 17\/2000 on income tax and Law No. 18\/2000
\non value-added tax on goods and services and luxury sales tax.<\/p>\n
The directorate initially hoped to submit the drafts to the
\nHouse in January, but it was delayed till February. The time
\nschedule is contained in a government White Paper that basically
\nhighlights key reform programs to be implemented by the
\ngovernment after graduating from the International Monetary Fund
\nbailout program earlier this year.<\/p>\n
Analysts said that the failure to complete the drafts on
\nschedule had shown that the government was not disciplined enough
\nto implement action plans included in the White Paper, which
\nbecome a benchmark to measure the government's seriousness in
\nimproving the country's economy.<\/p>\n
However, according to sources at the tax directorate and the
\nMinistry of Finance, the government had intentionally delayed
\ncompletion of the drafts because of a recent proposal by the tax
\ndirectorate to be independent from the Ministry of Finance.<\/p>\n
The corruption-infested tax directorate is currently under the
\nauspices of the Ministry of Finance.<\/p>\n
\"The state secretary had to postpone issuing the approval,
\npending the President's decision on the separation plan,\" the
\nsources said.<\/p>\n
As previously reported, officials at the tax directorate
\nplanned to adopt a similar system used by the U.S. Internal
\nRevenue Service (IRS). The IRS, a branch of the U.S. Department
\nof the Treasury, is tasked only with the collection of taxes and
\nenforcement of tax laws.<\/p>\n
But the IRS commissioner and chief counsel are selected by the
\npresident and confirmed by the senate, meaning that they are
\ndirectly responsible to the president and not to officials at the
\nDepartment of the Treasury.<\/p>\n
Tax officials recently lobbied President Megawati
\nSoekarnoputri on the plan.<\/p>\n
Director general of taxation Hadi Purnomo recently denied the
\nexistence of such a plan, while Minister of Finance Boediono only
\ngrinned when asked to confirm it.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-fails-to-finish-drafting-tax-laws-1447893297",
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"sponsor": "Okusi Associates",
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