Taxation needs great attention

Taxation needs great attention

From Bisnis Indonesia

Taxation is very important to a state because 70 percent of domestic revenues in the state's budget come from tax proceeds.

Unfortunately, in Indonesia, the government, the people and also the House of Representatives do not pay proper attention to taxation. Indonesia is yet to have its law on taxation principles as the implementation regulation required by the provision in Article 23 subarticle (2) of the 1945 Constitution, which very briefly stipulates: "That all taxes for the benefit of the state shall be based on the law."

In November 1999 the general session of the People's Consultative Assembly (MPR) will be convened. In connection with this upcoming general session, I believe that it is necessary for the government (in this case the minister of finance) and organizations related to tax matters, such as P-5, IKPI, IAI and KRPI, to prepare the following: a Items in the taxation sector to be presented to the standing committee of the MPR in order that the MPR general session may include it in the new broad outlines of the state's course. In my opinion, these items need not be high-sounding nor theoretical, as used to be the case, but must be practical, rational and realistic. b A proposal should be made to the chairman of the General Elections Commission (KPU) that the representatives of the intellectuals to be appointed members of the MPR should include at least one expert in taxation, who may come from a professional organization in taxation.

Besides the law on tax principles, Indonesia, I believe, also needs a National Agency for Researches on Taxation, which will be assigned to conduct research, the results of which will be used in the drawing up of tax laws and in the establishment of tax- collecting apparatus/administration/organization as well as in a tax-collection system suitable to the behavior of the Indonesian people. This agency should be expected to do all this in two or three years.

In a shorter term, all tax laws now in force must be reformed to ensure that they are really fair and nondiscriminatory, and that the taxes will be imposed in accordance with the capacity of taxpayers. Tax reforms in the short term are also expected to provide taxpayers with legal certainty and make sure that their rights are honored.

SUHARSONO H

Jakarta