Sat, 27 Mar 2010

From: The Jakarta Globe

By Dion Bisara
Finance Minister Sri Mulyani Indrawati stepped up her drive to reform the tax and customs directorates on Friday by inaugurating a new regulatory body called the Taxation Supervisory Committee.

“This committee should be the voice of taxpayers but also can help ensure the important role of taxation in contributing revenue to the state,” Sri Mulyani said in a speech after the inauguration ceremony.

“The committee needs to carry out a healthy supervisory function as well as checks and balances in anticipating emerging corruption in taxation.”

The TSC is independent of the Directorate General of Taxation and the Directorate General of Customs and will report directly to Sri Mulyani. Overseeing both bodies, the TSC will be responsible for confirming tax revenues and dealing with public complaints about tax officials. The establishment of the supervisory committee was mandated by the 2009 tax law.

The committee will be run by five officials, including Anwar Suprijadi, a reform-minded senior bureaucrat and former director general of customs who has been named the TSC’s first chairman.

Abdul Ansari Ritonga, the former director general of the state budget at the Ministry of Finance, has been named deputy chairman of the committee. The three other members are Hekinus Manao, the inspector general of the Finance Ministry, and two professors from the University of Indonesia, Sidharta Utama and Hikmahanto Juwana, both of whom are experts in tax issues.

Anwar told the Jakarta Globe that the committee would work to improve communication with the public, perhaps by setting up a telephone hotline to receive complaints about corrupt tax and customs officials. “Give our team some time to decide the exact mechanism,” he said.

Since taking over as finance minister, Sri Mulyani has made it one of her top priorities to reform the tax and customs directorates, which are widely considered to be hampered by corruption and red tape.

At a meeting with foreign investors on Thursday, Sri Mulyani said the government was serious about pushing for further reforms in the bureaucracy, particularly in the area of tax and customs, to help the country become more competitive internationally.

She explained that for the reform drive to succeed, the government must implement a system of punishments and rewards, develop the necessary technology and improve the welfare of civil servants to prevent them from being tempted into corruption.

Around 70 percent of the state’s revenue comes from taxation. In the proposed revision of the 2010 state budget, the government set a revenue target of Rp 733.38 trillion ($80.7 billion) for the tax directorate and customs directorate. The total state budget revenue target this year is Rp 973.16 trillion.