Indonesia Counts on Tax Census To Raise Revenue, Awareness
Less than 3.8 percent of companies and 7.7 percent of individuals report their tax payments to the government, which is why the Directorate General of Taxation began conducting a taxpayer census on Friday.
But officials attempting to conduct the survey ran into a snag. Shop owners were often not on site when the tax man came calling.
“The government will keep doing tax reform and optimizing the tax census to increase a stable and continuous tax income,” said Finance Minister Agus Martowardojo, who presided over the census’s launch at the Mangga Dua mall in West Jakarta.
As part of the ministry’s latest initiative, tax officers will approach taxpayers directly in their homes or businesses to collect data. The census also aims to hold people accountable for paying taxes, but it is unclear how this will be achieved.
“Officers will also educate people on how to submit tax reports and tax-paying procedures,” Agus said. “It is unfair that some people pay taxes but many others do not.”
The tax census will start in 31 areas in Jakarta, mostly in shopping malls, on Friday and then spread to other cities across the country. The tax office also provides services to obtain free tax identity cards (NPWP).
Some tax officers, however, have encountered problems meeting taxpayers directly at their businesses. On many occasions, officials said, business owners were not there when they called.
“Yes, there are some cover-ups. We did not meet the shop owners,” said John Gultom, a tax officer.
“That’s too bad. What we wanted was just to reach a common understanding about taxation,” he added.
After waiting some time for one owner to return, John left, leaving forms with the shop assistant that he expects to be returned to the nearest tax office. “There is no deadline for returning [the form],” he said.
Handaka Santosa, chairman of the Indonesia Shopping Center Management Association (Appbi), said he did not think shop owners were deliberately absent during the census.
“They usually have many branches, so I think it’s normal. The tax office also set no deadline for returning census forms, so I am confident most of the businesses will comply,” Handaka said.
“We the businessmen welcome this census because this kind of soft approach is what we expect from the tax office — not threats, but with understanding and accommodation.”
Agus said Indonesians had a low awareness of their tax obligations. He said that out of a workforce of 110 million, only 8.5 million were submitting annual tax declaration forms.
“That means the obedience rate was only 7.7 percent, far from Japan, which reached 50 percent,” he said.
It was the same story in the business world. Out of 12 million legally registered businesses, only 460,000 are reporting their tax payment.