Govt mulls move to curb tax corruption

Rendi A. Witular, The Jakarta Post, Jakarta

The government is planning to revise Tax Law No. 16/2000 in a bid to help curb corruption by tax officials and secure tax revenue for the state.

Minister of Finance Boediono said on Monday that the revision would be proposed to the House of Representatives early next year.

"As part of the tax reform program, the tax law should also be improved to comply with the current developments," said Boediono without providing details.

Meanwhile, House Commission IX legislator Paskah Suzetta told The Jakarta Post over the phone there were at least a number of articles that must be revised to fight corruption within the tax office.

He pointed out that articles 3 through 8 on the tax self- assessment system, which had been frequently abused by taxpayers to cheat on the real value of their tax obligation.

He said that the corruption was made possible in collaboration with dirty tax officials.

Paskah added that, to comply with the current situation in Indonesia in which corruption and collusion were part of everyday life for the vast majority of the people, the country should use a semi self-assessment tax system that could give fairness to both the taxpayers and the tax office.

In the semi self-assessment system an independent tax auditor or agency will be deployed to find the exact figure of the taxpayer's obligation before the tax form is submitted to the tax office.

Independent auditors would be needed to prevent manipulation and collusion by both taxpayers and tax officials.

Other vital articles which should be revised is article number 34 on the secrecy code of taxpayers.

Paskah said the code had for long become the "hidden bunker" for tax officials to "make deals" with taxpayers as the code had become an excuse for the tax office to escape public pressure to publish the names of delinquent taxpayers.

"The House and the Ministry of Finance have agreed that the taxpayers' obligation should be disclosed to the public," said Paskah, adding that the publication would enable the public to measure whether a particular taxpayer had paid the proper amount of tax based on their assets.

An auditor at a tax office in Jakarta said due to the secrecy code, tax losses caused by collusion between tax officials and taxpayers could well have reached an alarming figure of perhaps Rp 160 trillion (US$17.9 billion) last year.

Paskah said the government had not formally submitted any formal proposal to revise the tax law yet, but had at least hinted that it would be proposed before the general election in 2004.

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.