Caution greets plan to expose tax dodgers

Fitri Wulandari, The Jakarta Post, Jakarta

While hailing the government's move to name and shame delinquent taxpayers, a businessman and an expert warned separately that the move could turn into a new corruption tool for tax officials.

Luhut Pangaribuan, a legal expert said the move would increase transparency in taxation, but would not end collusion between tax officials and tax dodgers.

"By publishing their names, the government wants to prevent shady deals between taxpayers and tax officials," Luhut told The Jakarta Post on Friday.

He warned, however, that corrupt tax officials could use the threat as a tool to blackmail taxpayers.

"Corrupt tax officials could well try to exact backroom deals, using the threat of identity disclosure," Luhut said.

Jimanto, the secretary-general of the Indonesian Employers Association (Apindo), welcomed the move, saying that by naming and shaming tax cheats, the government would reduce the opportunities for businessmen and tax officials to collude.

"It is a good move. It poses no problems for us. The tax office is welcome to publish the identities of taxpayers they consider delinquent. They will be more willing to pay their taxes once their names are published," he said.

They made the comments after the Director General of Taxation released the initials of three foreign and two Indonesian businessmen who were barred from leaving the country after failing to pay billions of rupiah in tax arrears.

The office has also published the full identities of many other delinquent taxpayers in national and local newspapers.

Head of the Tax Collection Division at the Directorate General of Taxation Djangkung Sudjawardi said the directorate had decided to publicly announce the identities of tax dodgers if they still refused to show up at their local tax offices despite repeated summonses.

"Normally, after we publish their names, they come running to the tax office to settle their arrears," Djangkung said.

Taxpayers who still refused to come to the tax office after their names had been published would have their assets seized by the tax authorities. They would also be barred from leaving the country.

Djangkung added that the name and shame campaign was necessary to increase tax receipts, which were the main source of revenue for the state budget.

Tax arrears reached Rp 19.6 trillion and US$ 15.1 million as of August this year.

These figures consisted of individual and corporate tax arrears accumulated over the past ten years. The total rupiah tax arrears of Rp 19.6 trillion were five times the Rp 4.304 trillion allocated for social welfare, health and women's empowerment under the state budget this year, and far bigger than the Rp 11.55 trillion set aside for education, national culture, and youth and sports affairs.