Revised tax laws

Revised tax laws

From Gatra

Early in September 1994, the Government presented four Bills on Revised Tax Laws to the House of Representatives. Law No 6/1983 concerned general regulations and tax procedures; Law No 7/1983 concerned Income Tax; Law No 8/1985 concerned Value Added Tax and Tax on Luxury Goods; and Law No 12/1985 covered Property Tax. After a hearing with the Government (the Finance Minister), a special House committee was set up. The committee held its sessions between Sept. 27, 1994 and Oct. 13, 1994, and the results were as follows.

1. 90 percent of the government's proposals were accepted. This means the House made minor changes only.

2. The House accommodated very few suggestions and opinions from the public. The proposals were sent directly to the House. Many were published in the media.

3. The House gave priority to the interest of government. Many rights of the tax payers were curtailed. On the other hand, tax authorities were given more power. This is not fair, is discriminative and doesn't give any assurances or protection to tax payers.

4. The self-assessment system that was exercised since 1983 was abolished and replaced by an official assessment system, which was the old system prior to 1983. The people are no longer considered reliable in making self-assessments.

5. Many of the stipulations are contrary to the principles of the Tax Law and other Laws, such as Law No 14/1970 on the principles of the justice authorities, and Law No 5/1986 on State Administrative Court. They are also contrary to the 1993- 1998 Guidelines of the State Policy on the tax sector.

6. More tax articles are included. The indirect tax is relatively much higher than direct tax.

As a retired civil servant of the Tax Office, after 35 years of service to the Government, I am very disappointed at and concerned about this system. The quality of the tax law is decreasing. The tax payers are mere objects of tax returns without proper legal protection.

SUHARSONO HADIKUSUMO

Jakarta