BKP 'just seeking balanced system'

The Jakarta Post , Jakarta | Sat, 02/23/2008 4:44 AM | Business

In questioning the nation's tax law, the Supreme Audit Agency (BPK) aims at nothing more than a reliable system of financial checks and balances, its chairman said Friday.

The Constitutional Court is now reviewing a key 2007 tax law in an ongoing legal battle over the BPK's authority to audit the tax office.

"The important thing is that we've asked the Constitutional Court to determine whether or not the law runs counter to the 1945 Constitution. The BPK only wants to help the government generate a better tax ratio in the future," Anwar Nasution said, dismissing fears of "many, including the government" the BPK was trying to get at personal taxpayer information such as account documents.

"The agency has ethics codes that prevent its auditors from revealing taxpayers' personal information.

"What we need is to audit a taxation system controlled by the Finance Ministry's Directorate General of Taxation," Anwar said, commenting on concerns regarding privacy violations raised by the ministry.

Earlier this year, the agency filed a request for judicial review of Law No. 28/2007 undergirding the national tax system.

The agency complained that certain provisions of the law improperly limited its authority and ability to conduct audits.

In its review request, the agency has been focusing on provisions of the law requiring finance minister permission for obtaining state tax revenue details.

According to Anwar, the provisions violate the 1945 Constitution, which gives the audit agency autonomy in reviewing funds of state agencies and institutions, including state enterprises.

"According to the Constitution, the BPK is a state institution with a constitutional right to audit all state revenue, including revenue that comes from taxes.

"Taxes can't be audited in the absence of certain documentation, which has never been adequately provided by the Finance Ministry," Anwar said.

In a recent court session, Finance Minister Sri Mulyani Indrawati said that unfettered access to the state's tax revenue records would infringe on the confidentiality of taxpayer information which was protected under the taxation law.

Novy Pelenkahu, head BKP tax auditor, said the agency gave input on the matter during the deliberation of the law early last year.

However, he said, the outcome was unsatisfactory.

"We sent the suggestions several times through written and verbal statements. Actually, the government and the House tried to accommodate our requests in the drafting process, but it turned out to be not enough," Novy said. (uwi)

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