A survey found that Indonesia could lose half
of its tax revenues from the rampant corruption plaguing the tax-collecting
agency.
Jakarta-based
think tank Perkumpulan Prakarsa said that for 2012, the potential losses in tax
revenue could reach 521 trillion rupiah (US$55.9 billion) or almost 50 per cent
of the total.
The
government expects 1,033 trillion rupiah ($141 million) in tax revenues this
year.
Perkumpulan
Prakarsa executive director Setyo Budiantoro said on Tuesday the figures came
from calculating the country’s tax revenue capacity. According to a standard
used by the International Monetary Fund (IMF), Indonesia is categorised as a
middle-income state.
J.
Prastowo, a researcher at the think tank, said that the loss in tax revenue
could be caused by systemic practices of corruption, incompetent tax officials
and inconsistencies in tax regulations.
“The
Finance Ministry never takes these problems into account, and the least that
the ministry’s Directorate General on Taxation can do is to make predictions,”
he said.
Prastowo
also said that it was easy for companies to evade tax responsibilities.
He said
that most companies have three methods of tax evasion; failing to report their
assets to tax offices, reporting the assets below their actual value and paying
an amount under the actual tax owed.
He said
that companies even went as far as bribing tax officials.
"Lately,
offers often come from taxpayers rather from the tax officials,” he said.
The
survey also found a low compliance rate among Indonesian companies and local
workers.
The
Central Statistic Agency’s (BPS) data shows that there are up to 12 million
Indonesian firms, but only two millions registered as taxpayers.
Of the
135 million middle-income workers, only 20 million workers registered
themselves as taxpayers.
The
think tank also found problems at the tax court, a special court to settle
taxation disputes, where taxpayers took advantage of legal loopholes to evade
taxes.
Meanwhile
on Tuesday, Agus Subagio, a retired tax official and a lecturer at the State
Accounting University (STAN), filed a judicial review at the Constitutional
Court (MK) against Law No. 14/2002 on Tax Tribunal, claiming that he had been
treated unfairly.
"I
have a tax case that is currently ongoing at the tax court. The case started in
2009 and throughout the court proceedings, the court asked me to first pay 50
per cent of my tax obligation if I wanted to appeal the court’s ruling,” he
told The Jakarta Post.
He said
that the court request did not make any sense, as it contradicted Law No.
28/2007 on General Rules of Taxation and made no mention of the 50 per cent
cost of litigation.
"It’s
strange because in some cases the tax court applies the rule, but in others
they just ignore it,” Agus said.
The MK,
however, decided to reject the proposal, citing procedural problems.
The
court instructed Agus to present a stronger case for future proceedings.
Setyo
said that taxpayers mostly won their cases in the court, alleging that tax
officials like to offer illicit deals to taxpayers who seek litigation.
"The
problem with tax is more of a systemic one,” he said.
News
Desk
The
Jakarta Post
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