New tax draft to encourage better law enforcement<\/p>\n
JAKARTA (JP): The government assured yesterday that the new
\ntax bill proposed to the House of Representatives (DPR) for
\ndeliberations will improve law enforcement and broaden the tax
\nbase to increase state receipts.<\/p>\n
\"The improvement in law enforcement will consequently mean the
\ngovernment will strengthen both supervision over tax collection
\nand measures against tax evaders,\" Director General of Taxes Fuad
\nBawazier told a one-day seminar on the new tax bill at the
\nBorobudur Intercontinental Hotel here.<\/p>\n
He expressed concern at the trend for the number of tax
\nevaders and the amount of tax arrears throughout the country to
\nsteadily increase every year.<\/p>\n
Fuad blamed the tax evasion and arrears on the poor management
\nof tax officials and the lack of awareness among taxpayers on the
\nneed for compliance with the tax law, which requires self-
\nassessment.<\/p>\n
\"We expect the DPR to adopt measures on law enforcement to
\nimprove the effectiveness of the self-assessment scheme,\" he
\nsaid.<\/p>\n
The tax bill, which is designed, once passed into law, to
\nreplace the existing 10-year-old law, is expected to be approved
\nby the DPR in January next year.<\/p>\n
Yesterday's seminar, organized by the Jakarta chapter of the
\nIndonesian Economists' Association (ISEI), featured Bawazier as
\nthe single speaker. He presented guidelines on the draft tax law.<\/p>\n
Senior economic analyst Anwar Nasution, the chairman of the
\nEconit economic and trade consulting firm, Rizal Ramli, and the
\nassistant to the coordinating minister for economy and finance,
\nIrzan Tandjung, acted as panelists in the seminar, which was
\nchaired by economist Sjahrir.<\/p>\n
Target<\/p>\n
The seminar was a part of a two-year program sponsored by the
\nDirectorate General of Taxes, aimed at collecting input from the
\npublic for the revision of tax laws.<\/p>\n
Bawazier, who is also chairman of ISEI's Jakarta chapter, said
\nthat the draft law will cover taxation on incomes generated by
\nIndonesian companies from overseas operations, which are so far
\nunreachable by the current law.<\/p>\n
According to Bawazier, the new tax bill will also intensify
\nthe collection of withholding tax by employers.<\/p>\n
He said the bill will also include the collection of taxes on
\ncapital gains resulted from the sales of shares on a stock
\nmarket. \"But I am not in the position to elaborate on the details
\nof the tax on capital gains because all things related to the law
\nare still under examination,\" he added.<\/p>\n
Rizal suggested that the new law lower rates of taxes on
\nincomes generated from certain business activities in eastern
\nprovinces of the country.<\/p>\n
Forestry<\/p>\n
On the other hand, he thought that the new law should impose
\ntaxes on forestry businesses. \"According to our recent study, the
\nforestry industry can contribute tax proceeds of some $2.5
\nbillion per year,\" he pointed out.<\/p>\n
The government, under its 1994-95 budget, expects to receive
\nRp 34.81 trillion (US$16.01 billion) from taxes, a substantial
\nportion of its projected total domestic revenues of Rp 59.74
\ntrillion. The tax revenues are expected to consist of Rp 18.84
\ntrillion from income tax, Rp 13.24 trillion from value-added tax,
\nRp 1.63 trillion from land and building tax and Rp 281.7 million
\nfrom other taxes.<\/p>\n
Rizal also suggested that capital gains from the sales of
\nshares on stock exchanges be exempted from income tax in order to
\nattract more foreign investments.<\/p>\n
Foreign investors play an important role on the capital market
\nbecause they dominate daily trading of shares.<\/p>\n
According to a World Bank survey, Indonesia's tax ratio is the
\nlowest in the Association of Southeast Asian Nations (ASEAN),
\nreaching only 13 percent of its total gross domestic product
\n(GDP). Thailand leads the association with a ratio of 17.7
\npercent, followed by Malaysia with 15.2 percent and the
\nPhilippines with 14 percent. (fhp)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-tax-draft-to-encourage-better-law-enforcement-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}