Threat not to pay taxes

In the rallies held in response to the simultaneous increases of fuel prices, electricity rates and telephone tariffs, the protesters demanded that President Megawati Soekarnoputri and Vice President Hamzah Haz resign. I can certainly understand this demand. However, the threat made by the chairman of the Indonesian Chamber of Commerce and Industry (KADIN) and the chairman of the East Java chapter of the Indonesian Employers Association (Apindo) that their members would boycott taxes (The Jakarta Post, Jan. 10, 2003) defies reason.

I don't think that individual nor corporate taxpayers will have the courage to implement this boycott. Tax regulations are laws, and very heavy sanctions are placed on violators.

Articles 21, 23 and 26 of income tax regulations on value- added tax and sales tax on luxury goods stipulate that these must be paid on the 10th of next month at the latest, otherwise a fine of 2 percent per month is imposed. Income tax must be paid at the latest on March 25. Apart from administrative sanctions (the 2 percent fine), tax offices can impose other sanctions amounting from 50 percent up to 100 percent the value of the outstanding taxes. They are also authorized to confiscate taxpayers' companies or belongings as payment.

As stipulated in Article 22, if tax remains outstanding, imported goods can be detained by the customs office.

In short, companies can only defer paying income tax when they are bankrupt, sustain heavy losses in revenue, or their earnings in 2003 decline as a result of the 2003 hikes in fuel prices, electricity rates and telephone tariffs.

This means another year must pass before companies can realistically boycott tax payments.

SUNARTO PRAWIROSUJANTO

Jakarta