KPK urges tax officials be subject to criminal law

Urip Hudiono, The Jakarta Post, Jakarta

The Corruption Eradication Commission (KPK) has suggested that the tax law amendments currently being drafted stipulate that wrongdoings by tax officials be considered criminal acts of corruption that should be open to legal prosecution, in order to provide a sense of equality in the tax system.

The country's antigraft watchdog also opposed giving greater authority to the tax office without adequate supervision, arguing that it could lead to corruption and abuse of power, thus undermining the government's efforts to improve public services through tax reforms.

Speaking at Tuesday's hearing with the House of Representatives' commission on tax amendments, KPK chairman Taufiqurrahman Ruki said that since tax revenues directly involve tax collection and are directly administered by tax officials, any misconduct involving funds or procedures should be defined as corruption.

"A wrong assessment of the amount of taxes to be paid can be considered as corruption. It's similar to any wrongdoings for an individual's benefit that cause losses to the state, and as such meets the definition of a criminal act of corruption according to Law No. 31/1999 on anticorruption," he said.

"By stipulating such misconduct as corruption, the involvement of police, prosecutors and the KPK will ensure proper handling (of these cases). This is to ensure equality between tax officials and taxpayers."

In the government-proposed amendments to the tax laws, harsh sanctions -- including imprisonment -- would be imposed on taxpayers on indications of wrongly assessed tax. On the other hand, any violations by tax officials would only attract administrative sanctions through the finance ministry's internal control system.

The issue has sparked public debate on concerns that the draft laws will in fact be detrimental to the country's business and investment climate.

Taufiqurrahman emphasized the principle of equal treatment between taxpayers and tax officials, considering that Indonesia's tax system is based on self-assessment.

"It also means that tax officials should guide and supervise tax assessment. But in reality, taxpayers are so afraid of the tax office due to their overwhelming power and sanctions," he said.

He pointed to the possibility of abuse of power and violation of taxpayers rights by tax officials.

Therefore, Taufiqurrahman suggested that the new tax laws clearly define tax officials' duties and responsibilities in the tax administration process, including the procedures and documents needed to pay tax, the verification time and the amount of tax payable.

"Any complaints on assessments should also be quickly resolved by independent tax courts, within a maximum one month's time, the KPK is suggesting," he said.

Taufiqurrahman said KPK has yet to focus on uncovering rampant corruption practices in the tax office, but has recently been assessing many complaints from taxpayers, especially regarding tax restitution claims, again showing how the current tax regime still fails to fulfill the equality principle.