Tax office to recover 30% of tax arrears

Tax office to recover 30% of tax arrears

The Jakarta Post, Jakarta

The government hopes to collect some 30 percent of tax arrears
this year following the introduction of a decree allowing tax
evaders to be held for one year without trial.

"We project that some 30 percent of total arrears will be
fully paid this year. The rest hopefully will be settled in
installments (in the following years)," Director General of
Taxation Hadi Purnomo said on Thursday.

Hadi said the amount of tax arrears as of May had reached
about Rp 19.86 trillion (US$2.42 billion).

On Wednesday, the Ministry of Finance and the Ministry of
Justice and Human Rights signed a joint decree allowing for the
temporary detention of recalcitrant taxpayers.

The cash-strapped government is under pressure to increase tax
revenue to finance the state budget, which is heavily burdened
with the huge cost of the late-1990s bank bailout program. With
foreign financing expected to decline, the government has to turn
to domestic financing sources.

Experts have said that improving the tax administration
system, including making wealthy people and companies pay their
taxes, is one step the government must take.

Last year, the government introduced a special tax office to
oversee large companies.