House welcomes next tax bills as revenue getters

JAKARTA (JP): The House of Representatives (DPR) yesterday welcomed the tax bills which will improve law enforcement among taxpayers and streamline the tax collection system.

The four political factions of the House said in their general views on the bills, in a plenary session that will amend the tax laws introduced in 1984, that law enforcement is a key factor in increasing the government's tax receipts.

The factions expressed concern that taxpayers' compliance with the tax rule is still relatively low, partly caused by the moral frailty among taxpayers and tax officials on the role of state budget.

Each of the factions gave their own different figure on the ratio of the number of taxpayers against the population, but all of them concurred that the improvement of law enforcement will help raise the number of taxpayers in the country.

"It is estimated that our country is home to only three million taxpayers, as compared to its population of 185 million people," a spokesman for the Armed Forces (ABRI), Soetrisno, said.

"We welcome the spirit of the law enforcement in the tax bill with a commitment of taking strict measures against taxpayers and government officials who are involved in tax evasion and malfeasance," he said.

The faction added that a better administration proposed by the bills will also improve the efficiency of tax collection with the self-assessment scheme.

Setyadji Lawi, spokesman for the Indonesian Democratic Party (PDI), said that improvements in the quality of the work of tax department officials is also important in supporting the success of law enforcement. "We therefore suggest that the government improve its supervision of the officials involved in tax collection," he said.

The four factions also agreed that the streamlining of the collection system will most likely increase the compliance of taxpayers.

Administration

The Golkar faction suggested that the tax administration should be simplified, considering that many taxpayers are reluctant to spend much time dealing with administrative affairs.

Many businessmen hire consultants to deal with their tax payments, said the spokesman of the Golkar faction, Jusuf Talib.

Director General of Tax Fuad Bawazier told reporters after the plenary session that he has instructed tax officials throughout the country to realign the system of tax collection to make tax payments easier.

According to its budget plan for the 1994/1995 fiscal year, the government expects to receive tax revenues of Rp 34.81 trillion, 58.2 percent of its planned total domestic revenues of Rp 59.74 trillion.

Out of the tax revenues, Rp 18.84 trillion is expected from income tax, Rp 13.24 trillion from value-added tax, Rp 1.63 trillion from land and building (property) tax and Rp 281.7 million from other taxes.

The four factions also expressed their concern that the new tax bills do not propose more tax bases, which are supposed to raise state revenues.

The United Development Party (PPP) faction, for example, said that the bills do not mention the collection of taxes from forestry, fishery or agricultural businesses.

The faction expected the government forestry, fishery and agricultural products, which are subject to tax, to be in the revenue estimates.

The PPP faction supported the government's proposal of giving special tariffs to investors and entrepreneurs running businesses in remote areas or in the eastern parts of the country.

"We are optimistic that special tariffs will attract more investors to do business in less-developed provinces," Mukrom As'ad of the PPP faction said.

"We suggest that the government give a tax break for those who are ready to do business in eastern provinces," he added.

Tax Director General Fuad Bawazier told reporters that the government is now preparing a new deregulation on tax rates for companies investing in less-developed areas.

"I cannot give details now, but I assure you that the special treatment is coming," he said. (fhp)