Most of political elite evade tax payments: Government

Most of political elite evade tax payments: Government

MANADO, North Sulawesi (JP): Over half of the country's
legislators, many ministers, generals and other high-ranking
government officials were evading tax payments, Director General
of Tax Machfud Sidik said.

Machfud said that many members of the country's political
elite received incomes outside their taxed salaries, which they
did not declare to his office.

"Don't just look at the ordinary citizens, even the members of
our political elite don't fulfill their tax obligations," he told
reporters over the weekend.

He said that this situation showed the lack of a sense of
civic obligation among the public.

"Given these conditions, it will be difficult to reach our tax
revenue targets," Machfud said.

He added that raising the public's awareness of civic
obligations required long-term educational programs similar to
those involved in raising the public's awareness of environmental
issues.

On the other hand, Machfud said, the government must improve
the quality of its public services, otherwise people would never
truly understand the benefits of their tax payments, and hence
would keep evading them.

"They (the people) are already accustomed to paying officials
to do work for which they are also being paid by the government,"
he said.

Taxpayers, he said, demanded that they be served properly
without having to fork out unofficial fees.

"Raising tax awareness and improving public service quality go
hand in hand," he added.

At present, he said, out of approximately 20 million potential
private taxpayers, only 1.3 million were registered with his
office.

Even then, he said, some 40 percent of the 1.3 million, or
about 520,000 taxpayers, were fictional since their names and
addresses somehow did not match up.

"And not even all of the remaining taxpayers, who are
categorized as compliant, pay their taxes in full," he added.

Machfud said he expected to increase the number of registered
taxpayers by three times within the next five years to about four
million.

According to him, the number of registered taxpayers has grown
by only 60 percent from around 800,000 people over the past 10
years.

Machfud said the government and the House of Representatives
planned to draft a law on tax amnesty, which aimed at encouraging
current tax evaders to register their real income with the tax
office.

"I am targeting 20 million potential tax payers with this
law," he said.

He said the law would offer current tax evaders a cut in their
unpaid taxes, if they report their real income to his office and
henceforth honestly meet their tax obligations.

The law, he said, would overlook the origin of a tax payers'
wealth, thus encouraging hose involved in corrupt practices to
submit true returns without fearing prosecution.

He said that under the planned law, tax officials would be
obliged to keep the identities of such private tax payers
confidential.

"This is a delicate issue and will invite much political
interference," Machfud predicted.

Plans for a tax amnesty for private tax payers were initially
included in an article of the tax law amendment bills, which the
House of Representatives recently approved.

But the House withdrew the article, proposing the drafting of
separate legislation on the matter.

Machfud said people might misinterpret the law as a scheme to
forgive corruptors.

"Ask God for forgiveness. Being realistic, we just want their
money," he said.

According to him, the country is not even capable of solving a
single high-class corruption case through legal means, much less
prosecuting major corruptors and recovering illicitly acquired
state funds.

He said that the law primarily aimed at expanding the tax base
to include ordinary citizens who have so far evaded their tax
obligations. (bkm)