The biggest taxpayers<\/p>\n
There are not many surprising entries to the list of
\nIndonesia's 200 biggest individual and corporate taxpayers for
\n1995, as announced by Tax Director General Fuad Bawazier Sunday.
\nMost of them, especially those in the top 100 taxpayers for both
\ncategories, are familiar at least to the general public who
\nperiodically peruse the business pages of newspapers. Many of the
\nnames in the top individual taxpayer list are related to those
\nincluded in the corporate taxpayer list. The individuals are
\neither the owners or directors of the biggest corporate
\ntaxpayers.<\/p>\n
We know both the top individual and corporate taxpayers are
\nthe largest in their respective categories but it is obviously
\nimpossible to know how much tax they have paid because that is a
\nsecret protected by law. Such details are known only to the tax
\nofficers. But a rough indicator of the amount of taxes they paid
\ncan be seen from the three tax brackets set by the income tax
\nlaw: 10 percent for an annual income of up to Rp 10 million
\n(US$4,230), 15 percent for an annual income of more than Rp 10
\nmillion up to Rp 50 million and 30 percent for an annual income
\nexceeding Rp 50 million.<\/p>\n
The rankings of the top taxpayers for both categories
\nnaturally fluctuate with the annual incomes earned. We should not
\nbe easily misled to the wrong conclusions, let alone suspicions
\nof tax evasion or underpayment, whenever a taxpayer was sharply
\ndowngraded in the list in a particular year. But income is not a
\nfixed variable for top-income earners. The income of companies'
\nowners or shareholders does not fluctuate according to the
\nprofits of their businesses but mainly due to the dividends paid
\nout of their corporate profits. A company, for example, can rank
\nvery high in the list of corporate taxpayers but its owners may
\nnot be included in the top individual taxpayer list because the
\nshareholders decide to reinvest the bulk of the earnings.<\/p>\n
But there are several outstanding trends worth noting in the
\nannual lists of top taxpayers. One of them is the persistent top
\nrankings gained by the two largest clove-cigarette makers-- PT
\nGudang Garam and PT HM Sampoerna since 1991. This indicates both
\nhigh profit margins and steady increases gained by the cigarette
\ncompanies. No wonder the owners of the cigarette companies have
\nsteadily topped the list of the biggest individual taxpayers. For
\n1995, five of the seven owners of Gudang Garam ranked from the
\nthird to the seventh and two others ranked 22nd and 31st
\nrespectively. The Sampoerna family has also persistently occupied
\nthe top ranks. The Soedono Salim family who owns hundreds of
\ncompanies put only three of its members on the list -- in the
\n1st, 8th and 26th ranks respectively.<\/p>\n
Another outstanding trend is the steady top ranking of the two
\nstate-owned telecommunications companies-- Telkom and Satelindo.
\nAlso highly noticeable is the increasing number of publicly-
\nlisted companies in the list.<\/p>\n
One may criticize the fact that the 200 biggest individual
\ntaxpayers accounted for a mere 2.7 percent of the total
\nindividual income tax receipts. Tax Director General Fuad
\nBawazier admitted that his office received only 1.2 million
\nindividual income tax returns in 1995, while the number of
\nregistered individual taxpayers totaled more than 10 million.
\nThis indicates the crucial role played by company employees who
\ndo not file individual tax returns because their income tax is
\ndirectly withheld by their employers (companies) and is filed
\ntogether in the corporate tax returns.<\/p>\n
Despite the extreme lack of details disclosed by the top
\ntaxpayer lists, the annual rankings should be welcomed as part of
\nan educational process for the people to fulfill one of their
\ncivic duties -- paying taxes. The government and analysts have
\noften conceded that the potential tax capacity in the country has
\nremained largely untapped and the ratio of income tax receipts
\nagainst the gross domestic product is the lowest among ASEAN
\ncountries. We still have a long way to go in instilling a high
\nsense of tax compliance. But such an awareness could be enhanced
\nif taxpayers knew that their money was being spent for the
\npublic's benefits and not wasted through inefficiency, corruption
\nand other forms of malfeasance.<\/p>",
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