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.