Council suggests expanding role of tax inspectors

JAKARTA (JP): City revenue office tax inspectors are to have stronger authority in the future if a new rule on development tax is passed.

Councilors said yesterday they were in favor of a stronger role for tax officers in inspecting suspected tax evasion.

"We support an extended role for tax officers," Amarullah Asbah, the secretary of commission C, for city revenue, said.

"This is needed given the development of more hotels and restaurants" and other public centers imposing the 10 percent development tax on consumers, he said.

The former 1977 city rule number 9 was issued at a time when there were many fewer eateries and lodging facilities, he said.

Yesterday the commission visited the Horison Hotel in North Jakarta and two restaurants, with officers from the revenue office, the tourism agency and other agencies.

The visit aimed to gain further insight ahead of today's scheduled meeting on the draft of the new rule.

"Although the city's target for income from development tax has been reached, the problem is that there are still many facilities which do not have proper accounts yet," Amarullah said, though he added that the Horison seemed to be among those that did.

Cholid Nasution, the deputy of the city revenue office, said that although officials can inspect accounts, their investigations have been turned down by a national body called the Tax Advisory Council.

Cholid cited cases in which taxpayers complained to the council, saying they were charged too much.

"When we forwarded our investigations the Council said we have no such rights according to the 1977 rule," Cholid said.

Amarullah said the legal role of tax officers as inspectors will complement the main aim of the new rule to foster self assessment of taxpayers.

"The officers should function as public servants, which are only needed to inspect accounts when necessary," Amarullah said.

Earlier commission chairman Helmy A.R. Syihab said control mechanisms in the form of cash registers are also necessary to record the 10 percent development tax paid by consumers.

Without such a mechanism the public cannot be sure whether their payments reach the city treasury, Helmy said.

Cholid said that in the 1995/1996 fiscal year, the Rp 194 billion (US$82.73 million) received from the development tax, which has exceeded the target of Rp 192 billion, shows that so far the absence of cash registers has not been much of a problem.

The tax was derived from 146 hotels and 3,005 restaurants.

Cholid assured that not much more income from development tax can be expected, as officials at the lowest levels "immediately approach newly-opened restaurants."

The target for the next fiscal year has been set at Rp 230 billion, given the average 10 percent annual increase of hotels and restaurants.

Development tax is among the city's largest income sources, following taxes on automobile ownership documents.

City revenue reached Rp 1.8 trillion in the 1995/1996 fiscal year. (anr)