'Report foul play to me': Tax chief

'Report foul play to me': Tax chief

JAKARTA (JP): Tax Director General Fuad Bawazier has urged taxpayers to report directly to him any tax officials who attempt to extort money or engage in any other form of improper conduct.

"I earnestly appeal to all taxpayers who feel they are being harassed or mistreated by tax officials -- regarding the assessment of their tax obligations -- to report directly to me," Fuad said in an interview with The Jakarta Post yesterday.

Fuad said many taxpayers had brought problems with tax officials directly to him and their difficulties had been satisfactorily resolved.

The director general made the statements in response to concerns about recalcitrant tax officials raised by foreign businessmen attending The Economist Conferences' Roundtable with the Indonesian Government, which ended on Tuesday.

Many foreign businessmen participating in the three-day conference cited corrupt tax officials as one of the biggest problems encountered in doing business in Indonesia.

"The tax officials never believe our tax assessment. They always have an assessment of their own with which to force us into negotiations," the chairman of a major Asian-based business group complained.

"Mind you, such negotiations usually result in illegal payments to the tax officials personally -- at the expense of state revenues.

"Tax officials insist that declared income, and therefore tax liability, should either remain constant or rise constantly. If your profits fall one year, it's impossible to get them to believe it."

Fuad argued, however, that businessmen who have prepared an honest tax assessment should not be afraid to report such difficulties directly to him.

"Taxpayers should not just complain. They should report, in good faith, to me; because such reports also help me to solve the problem and to weed out any corrupt officials," he said.

He said that for taxpayers to merely complain to non-competent bodies was not only futile but "also not fair to me".

"If a taxpayer has nothing to hide, why does he not bring his problems to me," he added.

Taxpayers could also report difficulties to one of the directors at the tax directorate general or to the chiefs of the provincial offices of the directorate general, the director general said.

"But if taxpayers are facing severe time constraints they should report directly to me, either by fax or mail," Fuad said.

Fuad said that not all businessmen were honest in their tax assessments and that, therefore, the problems they faced with tax officials were often of their own making.

"It is these dishonest taxpayers who are vulnerable to extortion by recalcitrant officials," Fuad said.

But neither are all tax officials lily white, he added, reiterating the importance of aggrieved taxpayers reporting their problems.

He said the cases brought to him by taxpayers often involved problems which were not caused by tax officials but, instead, by the taxpayers themselves. He cited several causes of disagreements between taxpayers and tax officials, including taxpayer non-comprehension of tax rules and problems related to transfer pricing.

"Our tax laws do apply the principle of self-assessment by taxpayers. But that does not mean that taxpayers can assess their taxes as they wish," Fuad said.

He said several taxpayers whose tax returns had not been examined for a few years had complained when they were called on by tax auditors.

"We always conduct tax audits despite the self-assessment system. But obviously only a small number of taxpayers are audited within a given year because of our limited resources," he said.

He said his office had its own way of selecting the taxpayers to be audited in order to get the best results.

"Even the United States, which applies the self-assessment system, conducts tax audits. In fact, as a percentage of the total number of taxpayers, the tax audits conducted in the U.S. are four times as many as we conduct in this country," Fuad said. (vin)