Tax court handles surging number of tax disputes

Rendi A. Witular, The Jakarta Post, Jakarta

Seven months after it received its first tax dispute case, the Tax Tribunal has now handled 1,058 cases valued at a total of around Rp 2 trillion (US$227 million).

According to the tribunal's internal report, which was made available to The Jakarta Post, some 988 tax dispute cases were filed by corporate taxpayers, and only 70 cases filed by individuals.

Secretary of the Tax Tribunal Achmad Suhari told the Post on Tuesday that the number of tax disputes would likely to increase sharply in 2003, as both the corporate sector and individuals became more aware of the existence of the tribunal.

"We forecast that there will be a sharp increase in tax and customs dispute cases next year as the public will become more aware of their rights and our existence," said Suhari.

To date, the tribunal receives, on average, more than a hundred cases per month. The court expects that the average number of cases filed in 2003 would increase to around 250 to 300 per month.

Suhari said one of the reasons for the relatively high rate of tax disputes was a result of shoddy work done by unprofessional tax officials in the assessment of tax value.

"As long as there are still "bad" tax and customs officials, the Tax Tribunal will still be flooded with dispute cases," he said.

To anticipate the rising number of cases, starting next year the tribunal will recruit dozens of new judges to add to the 20 existing judges.

Each case is handled by three judges at a time.

However, the court is currently facing difficulties in recruiting competent judges because they must not only have a strong knowledge of the criminal law, but must also be equipped with other qualifications including a good understanding of commercial laws, tax laws and customs procedures.

The Tax Tribunal was set up on April 12, 2002, to settle tax and customs disputes between the government and taxpayers, which includes both companies and individuals. The court started operating in May.

Disputes between taxpayers and regional administrations are also handled by this tribunal.

The Tax Tribunal is under the supervision of the State Administrative Court (PTUN) in which most decisions issued by the new tribunal are final and binding.

In certain cases an appeal to the Supreme Court could, however, be allowed.

So far, 28 cases heard at the tribunal have been transferred to the Supreme Court for an appeal process.

The tribunal replaced the role of a special government institution under the finance ministry called the Tax Dispute Settlement Agency (BPSP).

Under BPSP, hearings on tax dispute cases are not open to the public, to ensure confidentiality for companies, as it could be disadvantageous to some involved because competitors could obtain sensitive information on their operations or financial situation.