Govt opens special tax office for big business groups

Govt opens special tax office for big business groups

The Jakarta Post, Jakarta

The government is scheduled to officially open the Large
Taxpayers' Office (LTO) on Monday, which is specially assigned to
collect taxes from the country's top 200 businesses.

Coordinator for the LTO project Petronius Saragih said over
the weekend the new tax office would not be fully operational on
Monday as there were still many things to be prepared to make the
office complete.

The Ministry of Finance expects the office to be fully
operational in September this year.

According to Petronius, the Ministry of Finance had completed
the selection of 410 workers for the new tax office, but it had
yet to name the new office's head.

Furthermore, he said, the office, which has occupied space at
a building, formerly owned by the Humpuss Group, on Jl. Merdeka
Timur, Central Jakarta, had yet be fully furnished.

Nevertheless, Petronius assured the 200 taxpayers that they
could start paying their taxes at the office on the opening day
as the existing facilities were capable of supporting such
activity.

"The office will be inaugurated by the Minister of Finance
(Boediono). Representatives of all the 200 taxpayers have been
invited to attend the ceremony, and we hope that they can pay
their taxes there on the day itself," he said.

The LTO is expected to contribute around 23 percent of the
government's tax earnings this year, which are targeted at Rp
184.7 trillion (about US$21.2 billion).

The government is changing its approach in making large
businesses pay their taxes. While in the previous years, the
largest taxpayers were hailed and given awards, starting today
the taxpayers will be given the "privilege" of paying their taxes
in a special office.

The launching of the LTO is part of the economic reform
program agreed upon by the government and the International
Monetary Fund (IMF), which has been providing billions of dollars
in loans to help the country recover from the economic crisis.

The government has promised the IMF that it will implement
bold measures to minimize tax evasion, broaden the tax base and
clean up the corruption-infested tax directorate general by
setting up the LTO, strengthening the internal audit system,
launching a national tax audit and reporting system, and
vigorously going after tax arrears.

Some experts have praised the establishment of the special tax
office for the country's largest taxpayers, but warned that it
must promote transparency to prevent tax disputes between
taxpayers and tax officials particularly in "grey areas."

The gray area refers to expenditure that is often interpreted
differently by taxpayers and tax officials. The expenditure
includes traveling and entertainment expenses.

They also said it must be managed by clean officials, and
added there must be an ombudsmen's office, comprising comprising
independent people, to supervise the LTO.