Indonesia’s Tax Law Shields Corruptors From Scrutiny, Fitra Claims

Rizky Amelia

Corruptors and corrupt companies are being protected by Indonesia’s tax law, which protects confidentiality of taxpayer information, the Indonesian Forum for Budget Transparency said.

“The tax law actually protects corruptors,” Uchok Sky Khadafi, the investigation and advocacy coordinator for the forum, known as Fitra, said on Monday.

He argued the law does not provide transparency or follow the open information principle. Uchok said the law blocks the public from accessing information.

He said a matter like corporate taxes is actually a public matter. If companies reveal their tax obligations, based on their revenue, then the possibility for collusion between companies and tax officers can be reduced.

“This law carries no openness at all in this regard,” Uchok said.

The tax law also blocks the Supreme Audit Agency (BPK) from auditing data of taxpayers.

In the 2012 revised state budget, the government expected to generate Rp 1,358 trillion ($141 billion) in revenue, of which taxes account for 75 percent.

However Fuad Rahmany, the director general of taxation at the Finance Ministry, recently signaled that revenue from income taxes was expected to fall short of its target in the 2012 revised state budget.

He explained in December that his office will collect at most 95 percent of the targeted Rp 885 trillion in tax revenue this year.

A number of tax scandals occurred last year, including a high-profile collusion case involving an East Java tax official, Tommy Hendratno, and tax consultant James Gunarjo, who allegedly made deals for tax receipts for Bhakti Investama.

A recent Supreme Court ruling also reflected how companies are often in trouble for their taxes.

In mid December, the Supreme Court issued a ruling that ordered plantation conglomerate Asian Agri Group, part of billionaire Sukanto Tanoto’s Royal Golden Eagle group, to pay Rp 2.52 trillion in back taxes and fines for tax embezzlement.

“Much of the tax data is hidden,” Uchok said, adding that he called upon the government to revise the law.

In related news, the speaker of the House of Representatives, Marzuki Alie, responded on Friday to the recent news reports about findings from the Financial Transaction Reports and Analysis Center (PPATK) on suspicious “fat” bank accounts belonging to 18 House members.

He called on the PPATK to target not only lawmakers, but also officials at the tax directorate general as well as the police department.

“Many government officials, including in the police, also have these fat bank accounts. Come on, please also dismantled it [the bank accounts]. Don’t only target the House’s Budget Committee,” he said.

The House of Representatives Ethics Council welcomed the findings, but it appears in no rush to follow up on the report.

Ethics Council deputy chairman Siswono Yudohusodo said on Thursday that the findings were “just initial information” and the council does not see a precise indication of any wrongdoing.

The PPATK identified 18 suspiciously large bank accounts belonging to House Budget Committee members.