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Committee uncovers 12 loopholes in taxation
The Taxation Oversight Committee has uncovered 12 loopholes in the taxation system that can be exploited by corrupt officials and taxpayers, chairman Anwar Suprijadi told legislators in a hearing Thursday
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T
he Taxation Oversight Committee has uncovered 12 loopholes in the taxation system that can be exploited by corrupt officials and taxpayers, chairman Anwar Suprijadi told legislators in a hearing Thursday.
The loopholes begin at the examination process where tax officials examine taxpayers tax returns. “Findings [of tax evasion] can be negotiated,” Anwar told the House of Representatives’ Commission XI overseeing financial affairs.
If taxpayers object to the findings, there is a second loophole where tax officials offer to weaken the findings before sending them to the Tax Tribunal.
The third loophole occurs at the Tax Tribunal where judges and officials make “confusing” objections to benefit taxpayers, he said.
Anwar added that the next three loopholes occur when examining preliminary evidence, making the evidence ready for prosecution and during the trial by tampering with evidence and witnesses.
The next three loopholes were the stakeholders themselves: taxpayers, tax officials and Tax Tribunal officials.
The remaining loopholes were the “tricks”, he said, in which the stakeholders could design tax evasion schemes through accounting procedures, tax facilities including tax restitution and tax regulations.
“Some of the loopholes have multiplier effects, which means that if we shut down one loophole, it can solve six to seven other loopholes,” Anwar said.
Tax officials have recently become the target of criticism following reports by the Financial Transactions Report and Analysis Center (PPATK) of Rp 28 billion (US$3.1 million) in the personal bank account of tax official Gayus Tambunan. Another tax official, Bahasyim Assifie, had Rp 64 billion.
Gayus was fired from the tax office, while Bahasyim may be temporarily suspended, Hekinus Manao, inspector general at the Finance Ministry, said.
Anwar, the former director general of customs and excise at the ministry, also pointed out six loopholes in the customs and excise office, covering service, surveillance, information and technology, customs facilities, objections and supervision.
The ministry has identified six customs and excise officials with suspicious accounts from a list of 26 names brought up by the PPATK, Hekinus said.
Anwar said the tax office had only eight investigators at the Directorate of Internal Compliance and Official Resource Transformation (KITSDA), compared to the 33,000 tax officials. “KITSDA may have to review the number of investigators they actually need,” he said.
Finance Minister Sri Mulyani Indrawati said her ministry planned to issue a regulation that would allow it to examine the financial reports of tax officials. The regulation is based on a 1986 presidential decree, which states that ministers have the authority to compare the finances of officials to their tax returns.
