Around 70 percent of Central Java residents did not pay income tax in 2007 due to poverty and lack of awareness on tax obligations, says a local tax official.
"Public awareness of tax obligations has been dwindling in the past two years and this is a serious cause for concern," head of the Central Java Tax Directorate Office for Territory II Surjotamtomo told the media in Purwokerto on Thursday.
The tax office supervises 12 of the 27 regencies in the province : Karanganyar, Boyolali, Sukoharjo, Purbalingga, Temanggung, Kebumen, Klaten, Magelang, Purworejo, Purwokerto, Surakarta and Cilacap.
Surjotamtomo disclosed that only 53 percent of 187,000 individual tax payers in the province paid taxes, such as property taxes.
He said corporations and education institutions tended to skip paying taxes. "These include state agencies and foundations. We are also concerned at their lack of responsibility in paying taxes," said Surjotamtomo.
He added that in 2006 only 12,000 of the institutions, or 61.7 percent paid their dues, while in 2007 only 11,000, or 41.8 percent met their obligations.
He expressed grave concern that the issue also involved state treasurers managing state funds.
"We regret this because many of them like to play with tax cuts and practices aimed at avoiding tax," said Surjotamtomo.
He added that tax evasion was also prevalent among educational institutions. In 2006, only 53 percent of them paid taxes, and in 2007 this dropped to 41 percent.
Despite that, returns from income tax, according to Surjotamtomo, have gradually risen significantly in terms of quantity. In 2005, proceeds from income tax amounted to Rp 1.7 trillion (approximately US$188 million),
"In 2006, we recorded Rp 2.04 trillion and Rp 2.6 trillion in 2007. We hope we could reach a target of Rp 3.1 trillion this year," said Surjotamtomo.
He added his office was making efforts to familiarize the public on tax matters by working with relevant agencies to raise public awareness.
"We have worked together with Jenderal Soedirman University in Purwokerto to set up a tax center. Hopefully it will yield results," said Surjotamtomo.
The university will conduct studies and training on tax awareness.
Find Article by Date