Ceremony, pomp as 10 millionth taxpayer feted

Ceremony, pomp as 10 millionth taxpayer feted

Rendi A. Witular, The Jakarta Post, Jakarta

The Presidential Palace was suddenly turned into a glamorous
stage on Wednesday to celebrate the self-proclaimed success of
the Directorate General of Taxation in expanding the taxpayer
base to 10 million companies and/or individuals.

With a smile of delight, President Susilo Bambang Yudhoyono
shook the hand of Imam Suyanto, the principal of Junior High
School No. 143 in North Jakarta, the recipient of the 10
millionth taxpayer number.

In front of the audience, consisting of several noted
government and state officials, legislators, businesspeople and
celebrities, Susilo repeatedly thanked Director General of
Taxation Hadi Purnomo and his staff for their good work in
increasing the tax base.

However, Susilo and the audience may not be aware that some of
the 10 million taxpayers claimed by the tax directorate may only
exist on paper as the directorate could not verify the actual
number of people who are truly paying their taxes.

"The 10 million taxpayers are those who have received a
taxpayer number application form from us ... We still don't know
the exact number of people who have sent back the completed forms
and paid their taxes," admitted Hadi on the sidelines of the
ceremony.

Hadi, however, said he believed that most of the people
receiving the forms would eventually comply with the tax
regulations and honestly pay their taxes since the directorate
had sufficient data of their wealth from various sources.

To increase the number of taxpayers, the directorate has been
sending out millions of tax number application forms to those it
has categorized as potential taxpayers during the past few
months.

As of the end of last year, only 3.67 million of the country's
220 million population paid taxes -- just 13.5 percent of the
Gross National Product (GNP) -- one of the lowest among major
Asian economies.

Hadi said the sending of the application forms were not merely
to force companies or individuals to comply with the tax
regulations but also to make the public more aware of their
obligations as well as to learn the whereabouts of taxpayers.

"From this taxation drive, we also want people to realize
their rights and obligations of paying their taxes. We are
unlikely to take any stern punishment yet for those who are still
unwilling to get a taxpayer number and start paying taxes," said
Hadi.

He added that the tax directorate would give a six-month
period for people to apply for a taxpayer number and send it back
or face administrative sanctions.

The tax directorate claims that with an increase in the tax
base this year, the government is expected to reap an additional
Rp 5 trillion (US$490 million) from the added number of taxpayers
this year.

In the second revision of the tax revenue in the budget, the
government is forecasting Rp 352 trillion, or 13.3 percent of
GDP. It will account for around 70 percent of the total state
revenues this year.

During the ceremony, President Susilo urged people to honestly
pay their taxes in order to create good governance, aside from
urging the tax directorate to uphold fairness and transparency in
collecting taxes from the public.

"I hope people are honest in paying their taxes. As for the
tax directorate, I do hope that with the new technology and a
more developed taxation system, irregularities in the collection
of taxes will be halted," said Susilo.