Constitutional Court rejects BPK request

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Fri, 05/16/2008 12:51 PM  |  Business

The Constitutional Court rejected Thursday a judicial review on a tax law filed by the Supreme Audit Agency (BPK), saying the law did not violate the agency's rights as a government audit body.

"There were no constitutional rights abuses suffered by the BPK. Thus, we cannot accept the judicial review request," the court's chief, Jimly Asshiddiqie, told a court session.

The decision was approved by eight of nine court judges.

The BPK filed the judicial review request in order to garner the authority to scrutinize taxpayers at will to avoid possible state losses.

Tax collection accounts for about 70 percent of total state revenue.

BPK said it was its constitutional right as a state auditor to be allowed to examine all kinds of state revenue.

However, the court sided with the Finance Ministry's directorate general of taxation in saying it should protect the privacy of taxpayers.

BPK only has the right to investigate taxpayers if it acquires evidence of corruption.

Jimly said the dispute was a result of disharmony between the law on taxation and the laws on state finance.

The court therefore suggested BPK and the tax office continue talks on trying to create a memorandum of understanding (MoU) to solve the problem.

BPK and the directorate general of taxation earlier discussed an MoU on the tax law before BPK decided to submit a judicial review in January. BPK said the law obstructed its efforts to scrutinize taxpayers, and could foster corruption.

BPK chairman Anwar Nasution said he was disappointed with the court's ruling. "The MoU will not solve any problems. If a taxpayer's statement is not scrutinized, it may invite corruption."

A lawyer for BPK, Bambang Widjojanto, said the court's argument of taxpayer privacy protection was weak.

"And it sends a signal that a government office can escape BPK's examination," he said.

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