Govt to revise taxation, customs laws

Urip Hudiono, The Jakarta Post, Jakarta

The government is planning to revise the taxation laws to help improve the country's investment climate, the finance ministry says.

It would also revamp customs and excise laws to help crack down on the widespread smuggling occurring in the country, it said.

"The revision is also needed to secure Indonesia's fiscal stability, in terms of improving state revenues from taxes, custom duties and excise fees," Minister of Finance Yusuf Anwar said on Monday.

Law No. 16/2000 governs general taxation arrangements and procedures, Law No. 17/2000 deals with income tax, while Law No. 18/2000 imposes a value-added tax on goods and services, and a luxury sales tax.

The finance ministry earlier this year submitted a revision to the three laws to the State Secretary, which will soon send on the laws to the House of Representatives for deliberation.

Two laws -- Law No. 10/1995 on customs and Law No. 11/1995 on excise -- currently govern the customs and excise in the country.

"We last week withdrew our proposed revision to the taxation laws from the State Secretary, because we want to thoroughly review it again," Yusuf said.

"At the same time, we have also started a comprehensive evaluation of the customs and excise laws."

Yusuf explained that the revision was expected to take about two months, before the proposed changes would be announced to the public, particularly to the country's businesspeople.

Yusuf did not say what articles in the taxation laws would be reviewed.

The government had previously planned to implement a tax amnesty policy, giving tax evaders a reprieve to encourage them to start paying.

Several entrepreneurs had expressed concern the planned revision of the taxation laws, which would give more power to tax officers, would increase the likelihood of corruption in the already graft-ridden department.

Yusuf said the government's main concern in revising the laws on customs and excise were to do with articles related to smuggling.

"We will make the penalties against smuggling more severe," he said.

Yusuf, however, assured businespeople the revision would not create more red tape in customs inspections.

"Of course the revisions will make the inspections more strict, but we will all have to learn to work according to a better system," he said.

"Importers and exporters who have always conducted themselves within the law will have nothing to worry about -- it will be those involved in smuggling that we will target."

Following the new administration's pledge to crack down on smuggling, several importers and exporters have complained their goods have been piling up in the country's ports because of slow inspections by customs officers.