Tax chief refuses to publish names of large tax evaders

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Taxation has dropped its earlier threat to go public with the names of the country's largest corporate tax evaders, arguing that such a move would violate the existing taxpayer secrecy code.

The Large Taxpayers Office (LTO), a new unit under the directorate focusing on collecting taxes from the country's largest businesses, threatened last month to publish the names of delinquent taxpayers in September if they continued to be uncooperative in settling their tax obligations.

Director General of Taxation Hadi Purnomo said on Monday that going public with the names of errant taxpayers would risk his office being sued by the taxpayers for breaching the taxpayer secrecy code stipulated under Law No. 16/2000 on taxation procedures.

According to Article 34 of the law, tax officials cannot disclose any information regarding taxpayers.

"The matter had been discussed internally, and we concluded that the names of corporate tax evaders should not be published," Hadi said.

LTO director Sjarifuddin Alsyah, who first announced plans to go public with the names of the errant taxpayers, told The Jakarta Post on Monday that there was strong opposition from other senior tax officials on the planned move.

"There was disagreement during the meeting on the interpretation of the secrecy code," he said, adding that the number of those against the move were greater.

He said that announcing the names of the corporate tax evaders would have provided the opportunity for the public to "punish" the bad companies for not paying their taxes.

He said such a punishment would encourage companies to pay their tax obligations.

The newly established LTO is responsible for collecting taxes from the country's top 200 businesses, which are expected to contribute around 23 percent of the current tax revenue target of around Rp 185 trillion.

The tax office previously said that 30 of these big businesses were considered delinquent taxpayers, whose combined tax arrears in 2000 reached Rp 8.4 trillion, or about 60 percent of the total tax arrears of Rp 14.5 trillion for that year.

One function of the LTO, as agreed to with the International Monetary Fund (IMF), is to take bold measures to reduce tax arrears by 25 percent this year.

Meanwhile, chairman of Indonesian Corruption Watch, Teten Masduki, criticized the director general of taxation for using the taxpayer secrecy code as a reason to back off from publishing the names of the bad corporations.

"Tax evaders are criminals, if the tax officials protect them from the public it means they are protecting criminals," said Teten.

He added that publishing the names of the tax evaders would not necessarily violate the taxpayer secrecy code as the government had also published the names of the good taxpayers.

Rumors at the directorate general of taxation have it that Hadi was reluctant to disclose the names of the tax evaders due to his involvement in protecting the companies when he was the director of tax audit in 1999 and 2000.

Hadi dismissed the rumors as groundless.