On draft tax law

On draft tax law

The ministry of finance appreciates The Jakarta Post's
articles on tax reform published on three consequtive days, Jan.
14, Jan. 15, and Jan. 16, and its editorial on Jan. 19, but feels
that the tone and content do not accurately reflect either the
process or substance under discussion.

The laws reviewed are currently undergoing internal review,
which includes invited comments from experts from business
community and academia. The version described in your articles is
not the current version, but more importantly, as you indicate in
your quote from Mr. Errata, the process is not final, in direct
contradiction with your headline Government completes draconian
draft tax law on Jan. 14, 2004.

As you note, this internal process will be completed by the
end of the month and the amendment will be submitted to the House
of Representatives for open discussion with stakeholders where
the issues you raise can again be examined.

However, our greatest concern is with the tone of your article
and editorial. We do not think it helpful to set up a dichotomy
whereby you assume that tax officials characterize all tax payers
as "potential cheats or tax evaders" (the Post, Jan. 19, 2004)
and do not appreciate your characterization of tax officers as
"unscrupulous tax officials" (the Post, Jan. 14, 2004). At the
point we finish the amendment and submit it to the House we
welcome constructive criticism and helpful suggestions on
individual proposals.

Further, your characterization that the tax laws are far from
what was promised by the minister misses the point that they are
part of a larger package of tax reforms. Eliminating or reducing
luxury taxes, exempting commodities or simplifying tax forms do
not need to be done within the tax law. There will be an
associated package of government and ministerial regulations to
deal with these issues.

Finally, we do not believe that tax administration changes
proposed are "draconian". Most proposed changes relate to
penalties for late filing, requirements that books be held in
Indonesia and criminal activity with respect to fake receipts.

ANGGITO ABIMANYU
Agency for Fiscal Analysis
Ministry of Finance
Jakarta