Experts warn of abuse in tax policy
Experts warn of abuse in tax policy
The Jakarta Post, Jakarta
Experts said the move by the Directorate General of Taxation
in detaining tax evaders without prior trial could further
nurture extortion and collusion as it could be abused by
unscrupulous tax officials to intimidate taxpayers.
They said that the government had also to move as strongly
against corrupt tax officials as it did against bad debtors who
owed a large amount of money to the state.
Businessman Sofjan Wanandi told The Jakarta Post on Thursday
that the policy should be closely supervised, as there were
several indications lately that tax officials had been using the
"weapon" also to intimidate cooperative taxpayers.
"There have been several complaints from businessmen that tax
officials have recently started threatening them by taking
advantage of such a policy," said Sofjan.
Sofjan, who is also the chairman of the National Economic
Recovery Committee (KPEN), was commenting on the government's
recent move in sending tax evaders to jail for a maximum of one
year without trial.
Thus far, two tax evaders have been jailed, local businessman
Jasman Lim and Briton Mark Michael Greenwood.
Jasman was jailed for alleged nonpayment of tax on his
company, amounting in total to Rp 11 billion (US$1.29 million),
while Greenwood's arrears were Rp 45.8 billion.
Sofjan explained that several business lobby groups had
proposed to the government an "equal treatment policy" in the
revision of the Tax Procedure Law between tax officials and
taxpayers, because recently the tax directorate had become a
"powerful" agency.
"We have proposed such policy to be included in the draft law,
but the tax directorate has refused to accept it. They still want
to make the regulation, execute it and, at the same time, become
the judge," said Sofjan.
He explained that with "equal treatment policy", corrupt tax
officials could be jailed without trial, similar to that imposed
on tax evaders.
Legal expert Todung Mulya Lubis said the detention of
recalcitrant taxpayers without trial, or what is technically
known as gijzelling in the Dutch and Indonesian legal systems,
was lawful as it was permitted under Law No. 19/2000 on taxation.
"I support the move as long as it is used properly, but
similar treatment should also be meted out to debtors who owe a
debt to the state in the form of BLBI," said Todung, referring to
the Bank Indonesia loan facility channeled to troubled banks
during the late 1990s financial crisis, but mostly misused,
according to audits.
He said that the gijzelling move could be used as part of
efforts to stop widespread corruption and collusion in the
country among government officials and their cronies.
Meanwhile, former head of the tax collection division at the
Directorate General of Taxation Djangkung Sudjawardi said the
government would not release the detained tax evaders until they
had paid 50 percent of their tax arrears.
Although he left his post a month ago, Djangkung is still the
official in charge for tax arrears problems.
Djangkung said that there were concerns from an embassy whose
citizen was detained recently because of tax evasion; however,
the government would stick to its stance of complying with
existing regulations.
He said that before issuing the decree, the government had
summoned officials from the embassy to inform them of the problem
as well as to find ways to resolve it, but to no avail.