Mar'ie defends power for tax investigations

Mar'ie defends power for tax investigations

JAKARTA (JP): Minister of Finance Mar'ie Muhammad yesterday
defended the government's proposal to equip the tax directorate
general with the power to investigate taxpayers suspected of tax
evasion or other possible violations.

The minister said that investigational power is essential to
enable tax officials to collect reliable data and information
related to tax crimes.

He said in a hearing with a special team established by the
House of Representatives (DPR) to deliberate four tax bills that
the investigational power stated in article 44 of the tax bill on
tax provisions and procedures will not conflict with the code of
criminal procedures where investigational power is given only to
the police.

"The tax office is allowed only to investigate cases related
to tax crimes," he said in his response to team members'
questions about the government's plan to give the tax office
investigational power.

According to the Armed Forces (ABRI) faction, giving tax
officials investigational power would be counterproductive
because such a task, under the existing laws, should be handled
by the police.

The minister, however, argued that allowing tax officials to
investigate criminal cases related to tax evasion will be more
effective as they generally have better knowledge about
taxation.

The Moslem-dominated PPP and the Indonesian Democratic Party
(PDI) factions also questioned the government's proposal to
empower the tax director general to stop investigations on tax
crimes. An investigation on a criminal case can be ordered and
stopped only by the Attorney General under the existing code of
criminal procedures.

Limited

The minister of finance said that the power given to the
director general to order an end of an investigation on tax-
related crimes is limited only to such cases when taxpayers have
admitted their impropriety or they have settled their tax
payments.

The bill on the tax provisions and procedures is one of the
four tax drafts now being deliberated by the team. The other
three bills cover income tax, value added tax (VAT) and land and
building (property) tax.

The bill on the tax provisions and procedures also seeks the
establishment of a tax court as an independent tax arbitrator to
settle tax disputes between taxpayers and the government.

Tax dispute settlement is at present handled by the Tax
Advisory Council comprising of senior tax officials, senior
officials of the Supreme Court and members of the Indonesian
Chamber of Commerce and Industry (Kadin). The council is the only
tax arbitrator in the country.

Mar'ie said that the proposed tax court will have branches in
provinces so that tax disputes can be settled quickly.(hen)