The Finance Ministry is raking through the tax office to identify a suspected network of officials who have allegedly colluded with tax tribunal officers in brokering illegal deals in tax disputes.
The move came after a staff member at the tax office objection assessment unit, Gayus Tambunan, was found in possession of funds worth Rp 28 billion (US$3.08 million) that he amassed in less than a year, prompting allegations he had been taking bribes from people who had filed tax complaints.
“We will mainly focus on investigating tax officials. But if there are taxpayers involved we will act on this, similarly if there are tax judges involved,” Finance Minister Sri Mulyani Indrawati said in a press conference Tuesday.
She said the ministry would examine all tax officials working in the objection unit with some being dismissed temporarily or relocated to other units.
Director General of Taxation M. Tjiptardjo said 10 officials have undergone examination, one of whom is a director of objection assessment. They have been temporarily dismissed from their jobs, he said.
Inspector General Hekinus Manao at the ministry has been assigned to evaluate the internal compliance unit to ensure ongoing administrative reform that has been on track since 2007, Mulyani said.
The Gayus case began to attract public attention after former National Police chief of detectives Susno Duadji made a public statement on March 19 accusing top police officials of taking bribes for unfreezing Gayus’ bank account only days after he was dismissed from his post.
Susno was later named a suspect by the police for defamation.
The Presidential Anti-Judicial Corruption Taskforce has also looked into the case suspecting there might be a much bigger network of corrupt officials involved in the case, not only within the tax office.
The taskforce is currently focusing its investigation on the National Police and the Attorney General’s Office, but said it would soon launch an investigation into the tax office.
Mulyani said the alleged illegal practices indicated by the Gayus case could have been a negative consequence of the existing system. She said officials in the objection assessment unit such as Gayus might feel reluctant to approve complaints from taxpayers for fear that they would be suspected of taking bribes. A tax complaint usually occurs when tax- payers feel they overpaid their taxes.
A rejection from the objection unit is normally followed by an appeal to the appeal unit, which would later complete procedures for court proceedings at the tax tribunal.
Informed observers speculating on the modus operandi of the tax brokers say that kickbacks from tax- payers begin at the objection unit in return for speedy rejection so that the complaint would immediately go to court. Bribery is also suspected at the appeals unit as officers would assist taxpayers in brokering deals with tax tribunal officers. About 90 percent of judges in tax tribunals are tax office retirees.
The negative side-effect in the system, Mulyani said, had led to bad officers cooperating with taxpayers and Tax Tribunal officials to improperly influence decisions.
She urged that the new Taxation Supervisory Committee should finish its investigation within one month. “I want to have a comprehensive and fundamental correction before May,” she said.
Mulyani added the Tax Tribunal should be given more serious attention. She pointed out three major issues: Judges who are retirees of the Directorate General of Taxation, creating conflict of interest; too many disputes creating a logjam; and variations decision by judges, leading to transparency issues.
The Finance Ministry will cooperate with the Supreme Court and the Judicial Commission to help solve these problems.
