Businesspeople cautiously welcome tax tribunal law

Businesspeople cautiously welcome tax tribunal law

Adianto P. Simamora, The Jakarta Post, Jakarta

Local business players cautiously welcomed on Saturday the
approval of a new Tax Tribunal Law which should boost
transparency in tax dispute settlements.

While praising the law's goal of boosting transparency, Sofjan
Wanandi, chairman of National Economic Recovery Committee, noted
that transparency was not the only one needed by businesses in
solving tax disputes.

"Basically, the new law is better than the existing one, but
we still need to see how the implementation goes in practice,"
Sofjan told The Jakarta Post.

According to Sofjan, another main concern of business players
was the speed of the tax dispute settlement process.

"The faster (the process) the better, so as to avoid
opportunities for tax officials to accept bribes from taxpayers
for personal gain," Sofjan said.

The new law, which was approved by the House of
Representatives (DPR) last week, replaced Law No.17/1997 on the
Tax Dispute Settlement Agency (BPSP). The BPSP will be replaced
by an independent tribunal for tax dispute settlement.

Separately, Yudhi Komaruddin, secretary general of the
Indonesian Footwear Association (Aprisindo) concurred with
Sofjan.

"The transparency would not be effective to help resolve the
tax disputes if the settlement process takes too long," he told
The Post.

Businesspeople have long complained about the current BPSP
system because they (taxpayers) mostly ended up on the losing
side due to their weak position during the settlement of tax
disputes.

"We (taxpayers) are usually in a weak position to win the
dispute as we have to pay 100 percent of outstanding taxes before
the court," Yudhi said.

Under the BPSP system, an appeal can only be brought after 100
percent of outstanding taxes had been paid to the state.

"If we (business taxpayers) win the dispute, it takes a long
time for us to be compensated by the state," Yudhi said.

Under the new law, taxpayers only need to pay 50 percent of
their outstanding taxes before taking their dispute to the
planned tax tribunal.

While the BPSP hearings were done behind closed doors, the new
law requires proceedings in the tax tribunal to be open to the
public, so that everyone can see what is going on.

The tax tribunal would be under the supervision of the State
Administrative Court (PTUN) in which the decisions issued by the
new tribunal would be final and binding.

An appeal would, however, be allowed to go straight to the
Supreme Court.