Amendments of tax law may be until 2007

Amendments of tax law may be until 2007

Rendi A. Witular, The Jakarta Post/Jakarta

The newly proposed tax legislation amendments are unlikely to be
passed anytime soon with some lawmakers saying it would be
difficult to complete the deliberation of the amendment bills
amid fierce opposition from the business community.

The chairman of the House of Representatives' finance
commission, Paskah Suzetta, pointed on Friday to various issues
in the proposed amendments that needed to be clarified and
discussed further with the stakeholders.

"With the recent fuss over the draft tax legislation
amendments, more input from various parties will be needed to
ensure that the laws are not contrary to the public interest. We
expect the implementation of the laws to be delayed from 2006 to
2007," said Paskah.

Paskah, who chaired a team set up to deliberate the revisions,
made the comment on behalf the powerful Golkar Party, which has
the most seats in the House.

"The government claims that it has launched an intensive
campaign to introduce the amendments to the public. But the facts
show that there is growing concern among members of the public
over the drafts, especially the greater powers to be given to the
tax office," he said.

Based on the initial government schedule, the amendments --
the third raft of tax legislation reforms since 1983 -- should
have come into effect on Jan. 1, 2006.

The three amendment bills discussed by the House involve
changes to Law No. 16/2000 on general taxation arrangements and
procedures, Law No. 17/2000 on income tax and Law No. 18/2000 on
VAT and luxury tax.

Paskah said the Golkar Party wanted the proposed changes to
accommodate four principal issues; simplification of tax
administration, a reduction in tax rates, the offering of a tax
amnesty, and a reduction in the powers of the tax office.

Golkar would also urge the government to complete drafting the
arrangements for a tax amnesty law by November.

"The tax reform package cannot be effectively implemented if
there is no legislation authorizing a tax amnesty. We want to
ensure that once the tax reform process starts, nobody will evade
their taxes," he said.

Separately, another member of the commission, Emir Moeis,
agreed to the Golkar proposal to delay the implementation of the
tax legislation amendments until 2007 following the recent public
outcry.

"We should be careful when deliberating the amendment bills,
especially given the opposition from the business community. It
would be better for the government not to force the reform issue
next year to avoid problems in the future," said Emir.

Emir, who also sits on the House special committee
deliberating the amendments, said he was speaking on behalf of
the Indonesian Democratic Party of Struggle (PDI-P) -- the second
largest party in the House.

He said the PDI-P basically wanted the amendments to the tax
legislation to enshrine the principles of equity and justice, and
to close off any possibility of the powers given to the tax
office being abused by the government to quash its opponents.

"The most important thing for the PDI-P is that the draft
amendments will not be used by the government to prevent its
political opponents from voicing criticism," he said.

In addition, he said the amendments should also incorporate
provisions that would prevent unscrupulous tax officials from
extorting taxpayers, particularly members of the business
community.