Property tax errors admitted but no corrections planned

Rendi A.Witular, The Jakarta Post, Jakarta

Tax officials have admitted they made some major miscalculations that caused property taxes here to skyrocket, but the acknowledgment does not necessarily mean that all the mistakes will be corrected.

"We can't make a correction unless the taxpayers file an objection," a tax official at the Directorate General of Tax said.

Before filing the objection, the complainants should pay the tax first, according to the official, who spoke to The Jakarta Post under condition of anonymity.

He claimed that the miscalculation was caused by the lack of professional staff at the tax offices, as they have to input data for more than a million taxpayers into the computer.

However, when the Post visited two mayoralty tax offices located on Jl. KS. Tubun, Central Jakarta, and on Jl. Raya Pasar Minggu, South Jakarta, last week, most of the employees -- who are paid with taxpayer money -- were seen hanging around doing nothing.

A number of people had earlier complained about the increased property tax, which in some cases reached more than 300 percent. A resident who lives in Puri Kembangan, West Jakarta, for example, complained that he had to pay Rp 2.2 million this year, while last year, it was only Rp 700,000.

The director of property tax at the Ministry of Finance said the Directorate General of Tax had only imposed an increase of 5 percent of property tax as of Jan. 1. He claimed that the sharp increase of the tax was caused by a miscalculation and resulting errors in data input at the mayoralty tax offices.

Even though taxpayers have the right to file the complaints at the mayoralty tax office, there is no guarantee that they will get a quick, positive response.

The tax official interviewed by the Post said that the tax office has one year to make a decision about the complaints. Within that period, a letter would be sent to the complainants' address, and the answer could be simply "yes" or "no".

If the taxpayers are not satisfied, they can "appeal" to the tax dispute settlement agency (BPSP) and go to court. A complainant should send a letter to the agency and enclose necessary documents.

The agency will check the documents and ask for a clarification from the Directorate General of Tax. This process could take up to four months.

If the taxpayers need a lawyer, they are encouraged to hire the ones who have a specific tax license issued by the tax agency.

Taxpayers are not allowed an appeal if they lose the case, said secretary of the agency, Achmad Suhari.

"This is not a usual court where people could ask for an appeal to the high court or Supreme Court. Our decision is final," he said.

Currently, BPSP has 20 judges, selected under BPSP procedures.

From 1999 to 2001, 32 property taxpayers filed complaints to the BPSP. However, only five were granted tax reductions.

The complicated process to seek justice in tax value objections has precluded individuals from pursuing their objection to BPSP. According to Achmad, all of the taxpayers who brought the case to the agency were private companies.

"Private companies usually pursue their case here, as their property tax values are very high, usually over Rp 20 million. While individuals' taxes are usually far lower and they prefer to just settle their objection at the mayoralty tax office", said Achmad.

The 1999-2001 statistics issued by the Directorate General of Tax, showed that each year, about 10 percent of taxpayers in the capital -- now more than 1.48 million -- filed a tax objection at their respective mayoralty office.

The overall amount of the objections filed by taxpayers was Rp 28.796 billion (around US$ 280,000), in which only Rp 7.87 billion was returned to taxpayers.