Sat, 29 Mar 2003

'Corrupt tax officials should also be detained'

Rendi A. Witular, The Jakarta Post, Jakarta

Businessmen and analysts voiced support for the government's plan to put recalcitrant tax evaders into jail without trial.

They added, however, that similar treatment should be meted out to corrupt tax officials.

Mogul Sofjan Wanandi told The Jakarta Post on Friday that it would be only fair if corrupt tax officials were also thrown into jail without trial as part of the effort to stop widespread corruption and extortion in the tax office.

"The government should be fair to the public. Corrupt tax officials who get away with stealing billions of rupiah should also get a taste of life in the country's jails," said Sofjan, who is also the chairman of the National Economic Recovery Committee (KPEN).

Sofjan explained that so far there had never been a tax official put on trial on corruption charges.

The stiffest punishment imposed on them was dismissal from the service, he said, adding that even this was very rare.

Sofjan was commenting on the government's plan to send tax evaders to jail for a maximum of one year without trial as stipulated in a new joint decree to be signed by the minister of finance and the minister of justice and human rights next month.

The decree, which will come into effect "sometime in April", is aimed at reinforcing Government Regulation No. 137/2000 on tax evasion, which permits such punishment.

The decree has been drafted amid the government's growing concerns over the rising level of tax arrears, which have reached Rp 17 trillion (US$1.9 billion) over the past 10 years.

Thus far, the tax office has only confiscated the assets of tax evaders or banned them from traveling overseas.

Based on the joint decree, temporary detention may be imposed on uncooperative taxpayers who owe taxes of over Rp 100 million to either the central or local governments.

Transparency International Indonesia (TII) secretary-general Emmy Hafild supported Sofjan, saying it would be wise for the Directorate General of Taxation to set an example of proper accountability.

"First, clear out all the 'rats' from the directorate before punishing taxpayers," she said.

She warned that the decree could further nurture extortion and collusion in the directorate as it could be abused by officials to intimidate compliant taxpayers.

An auditor at a tax office in Jakarta, who spoke on condition of anonymity, told the Post that last year, tax losses caused by collusion between tax officials and taxpayers could well have reached the alarming figure of Rp 160 trillion (US$17.9 billion).

The auditor said that it was impossible for collusion cases to be disclosed to the public as both tax officials and taxpayers were protected by Law No. 19/2000 on taxpayer confidentiality.

"Only the taxpayers, the tax officials, the devil and God know their exact tax obligations," said the auditor.

This year, the government has targeted the collection of tax receipts worth Rp 210 trillion, a 16 percent rise over the 2002 figure of Rp 180 trillion.

Elsewhere, legal expert Luhut Pangaribuan said the detention of recalcitrant taxpayers without trial, or what is technically known as gizelling in the Dutch and Indonesian legal systems, was legal as it was permitted under Law No. 19/2000 on taxation.

"Many countries also have laws that allow the temporary detention of non-compliant taxpayers," he said.