City to prepare online tax system

The Jakarta Post, Jakarta

City Council Commission C for financial affairs suggested on Tuesday an online tax system to boost revenue, but city administration officials doubt that it would work.

In a council plenary session, Commission C said a City Revenue Agency online payment system could be established for taxpayers.

"We believe that an online system would boost city revenue as it would minimize leaks in tax payments," said commission spokesman Setia Budi, reading the commission's general view on the draft of a bylaw on hotels, nightlife venues and advertisement signs proposed by the city administration.

According to Setia, an online system would curb irregularities in tax payments as there would be less direct contact between tax officials and taxpayers.

With the system, he said hotel, restaurant and entertainment center patrons could directly pay value-added tax (VAT) when paying their bills.

Responding to the commission's suggestion, City Revenue Agency head Deden Supriadi doubted that the system would work any better than it did last year.

"But at that time, much of the equipment could not be operated. I don't know whether the equipment was damaged," Deden said.

He said earlier that his agency was preparing the online system, but it would be for big hotels and restaurants that already had good accounting systems.

"Their systems are ready to be connected to the City Revenue Agency's system, and therefore we do not need to invest too much," he said.

While for small hotels, restaurants and nightlife venues with poor accounting systems, the city administration would need to invest a large amount of money, including on buying computers for each tax target, he said.

The agency recently sent notices to 774 tax evaders, mostly hotels, restaurants, nightclubs and billboard owners with total VAT arrears amounting to Rp 58.5 billion.

Observers say that the sluggish payment of VAT could be understood as the managements of hotels, restaurants and nightclubs only acted as VAT collectors for the tax office.

A number of councillors and chairman of the City's Education and Training Center Ahyat M. Awe blamed City Revenue Agency personnel for the problems as they did not crack down on tax evaders even though they had the authority to do so.

"The problem happened because of collusion between officials at the agency and taxpayers," Ahyat, who was former city administration spokesman, said, adding that the online system would not totally solve the problem.

However, Governor Sutiyoso said that his administration approved of the idea. He said the administration would prepare for the online tax payment system so that it could be implemented next year.

"It is a good idea, we hope that next year the system will be ready," Sutiyoso added.