Govt continues modernizing tax system
Govt continues modernizing tax system
Tony Hotland, The Jakarta Post/Jakarta
The government is now moving fast to implement its new tax
administration system in tax offices across the country, and
expecting an annual increase of Rp 30 trillion (about US$3.21
billion) in tax revenue.
Speaking during a ceremony to kick off the implementation of
what is promised to be a modern, transparent electronic system
for six big money -- mostly for foreigners -- tax offices on
Monday, Minister of Finance Boediono said that the system would
eventually lead to better compliance from taxpayers.
"Taxpayers say they sometimes falsify their taxes because they
don't trust us. This modern system makes everything more
transparent. If they trust us, hopefully they will comply with
their obligation, so that more taxes will be collected to support
the state budget," said Boediono.
The six offices here comprise two that are specifically for
foreign companies and expatriates, two for foreign investors, one
for state-owned enterprises and one for domestic middle income
taxpayers.
"We hope that foreign investors will not be reluctant to
invest here now, because this system offers them accountability
and legal certainty," Boediono asserted.
The system works on a sophisticated, completely electronic-
based system (such as e-registration, e-filing, e-payment and e-
counseling).
The offices will be manned by well-trained tax officials, each
of whom will focus on certain taxpayers, and each of the
taxpayers will have their documents taken care of by tax
officials assigned to them. Each of the offices will also have a
complaint center.
With the application of the system, the government said that
taxpayers were guaranteed to get better and faster service as
well as quicker solutions to disputes to assure legal certainty.
The system was initially applied in the Large Taxpayers Office
(LTO), which was set up in mid 2002 after a recommendation by the
International Monetary Fund and is tasked with collecting taxes
from the country's largest income earners.
The establishment of the LTO and the plan to apply the system
in all tax offices here are part of the government's efforts to
reform the country's tax collection system and boost tax revenue.
The application of the system in these six offices and also in
the LTO means that 55 percent of the country's total tax revenue
would now be administered by a modern system.
The government expects that all tax offices on Java, which
accounts for about 80 percent of the country's total tax revenue,
would eventually be able to apply similar systems by 2007.
Director General of Taxation Hadi Purnomo said that the
biggest constraint in launching the system in all tax offices was
the availability necessary infrastructure.
Also as a part of the tax reform, the tax office established
in June a special task force that is assigned to deal with
serious cases and problems that involve foreign companies and
expatriates. There are several cases that have been processed,
involving companies from the Netherlands and Korea.