LTO staffs to get handsome salary and fringe benefits

LTO staffs to get handsome salary and fringe benefits

Rendi A. Witular, The Jakarta Post, Jakarta

Tax officials working at the newly-established Large Taxpayers'
Office (LTO) will get a very handsome salary, which could cause
envy among other government employees.

A source at the personnel development division of the finance
ministry who asked for anonymity told The Jakarta Post that the
tax officials at the special tax office would get "fringe
benefits" 20 times higher than those obtained by their colleagues
at the directorate general of tax.

He said that the higher salary was meant to prevent corrupt
and collusive practices at the LTO. He added that a finance
ministry decree on the matter had been issued.

The LTO was officially launched on Monday with a mission to
collect taxes from the country's top 200 businesses, many of
which had evaded tax obligations in the past causing massive
losses to the state.

As the government is under pressure to collect a greater
amount of tax revenue to help finance the state budget, the role
of the LTO will be very crucial as the 200 largest businesses
were expected to contribute 23 percent to total tax revenue this
year of more than Rp 184 trillion.

With the size of fringe benefits for ordinary tax official set
at Rp 420,000 per month, the figure for those working at the LTO
would jumped 20 times to Rp 8.4 million. Including basic salary,
an official at LTO would earn around Rp 10 million per month.

The finance ministry source said that the head of the LTO
could take home some Rp 40 million per month.

In comparison, a fresh university graduate working at the
finance ministry would only get Rp 1.3 million per month, while a
senior official at the directorate general of tax would only take
home some Rp 10 million each month.

Director General of Tax Hadi Poernomo declined to comment.
"Bapak refuses to comment on the issue," said his secretary
Wahyudi when contacted via phone.

But coordinator of the LTO project Petronius Saragih had
recently confirmed that the salary of the LTO officials would be
higher than those of the ordinary tax officials because the
former would work extra hard to collect taxes from the large
businesses, thus deserve to be given higher incentives.

Meanwhile, head of the House of Representatives Commission IX
overseeing financial affairs Benny Pasaribu criticized the higher
salary policy.

Benny, who claimed that he had already heard of such a policy,
said that there was no guarantee that the LTO tax officials would
be free from corrupt practices if the salary was raised.

"It is irrational to pay such huge benefit just to guarantee
that they will be free from corruption and collusion. It won't
assure that, the problem lays in their mentality which is so
severely corrupt," said Benny.

He added that he would raise the issue at an upcoming hearing
session with the finance ministry particularly at a time when the
state budget was already under severe pressure from the costly
bank bailout program.

It has been no secret that tax officials often engage in
collusive practices with taxpayers particularly large ones.

The government has recently said that 30 out of the 200
largest corporate taxpayers failed to pay their taxes in the 2000
financial year of around Rp 8.2 trillion out of the total tax
arrears of Rp 14.5 trillion during the year.

The higher salary of the LTO officials may only be matched by
people working at the Indonesian Bank Restructuring Agency
(IBRA), a special government agency set up in 1998 with a mission
to restructure the country's ailing banking and corporate
sectors. The agency has a four year mandate period.

Legislators have previously criticized the high salary of IBRA
officials at a time when their performance was very disappointing
with international donors criticizing the slow progress in asset
sale program.