NPWP a must for political party donors: Tax office

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Thu, 01/22/2009 8:00 AM  |  Headlines

Politicians must now think twice if they are to re-engage in the dirty politics of listing names of pedicab drivers, homeless people or others to gloss over money transfers for political campaigns, as the tax office puts in place a new regulation to weed out “money politics”.

On Wednesday, Director General of Taxation Darmin Nasution said the tax office had extended its reach to political parties, requiring party donors to have a tax file number (NPWP) when donating more than Rp 20 million (US$1,760), citing the widespread lack of transparency in campaign donations.

“This is a way to make donations more open and transparent. If only donors’ names are registered, there’s the possibility that a lot of donors will misuse other people’s names,” Darmin said after a seminar on tax as related to political parties.

He added political parties would not be taxed, but each donor must be in possession of an NPWP. People with an income of more than Rp 15.84 million per year are qualified to pay taxes, and as such must have an NPWP.

There were widespread media reports following the 2004 elections that some political parties had received hundreds of millions of rupiah in campaign donations from suspect sources that were later revealed to have been made under the names of pedicab drivers or similar others whose names had been misused for the purpose of concealing such donations.

Such incidents have prompted the General Elections Commission (KPU) to rule that people donating more than Rp 20 million must posses an NPWP.

“[Those wishing to donate] more than Rp 20 million for political party campaigns should attach their NPWP card, as stipulated in the KPU’s regulation,” KPU chairman Abdul Hafiz Anshary said.

He added the regulation would be imposed retroactively, meaning that donors who have already submitted funds to political parties are now required to append their NPWP cards.

The country will hold legislative elections in April 9 and a presidential election in July. A runoff presidential election will be held in September if required.

Tax head Darmin said his office would scrutinize political party television advertisements.

Research firm Nielsen Media Indonesia reported Tuesday the government and political parties spent Rp 2.2 trillion in TV ads last year, almost double the Rp 1.3 trillion spent in 2007.

Political party members say that figure will likely decrease this year as the global financial crisis takes its toll.

“People who advertise will have their tax obligations scrutinized,” Darmin said.

“How can they spend that much, how much is their income?”

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