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Jakarta Post

Census kicks off at malls without store owners

After the new government tax census program had initially been announced, many expected it would incorporate a greater number of taxpayers in the tax data system in order for tax offices to improve monitoring of both paid and unpaid obligations

Esther Samboh (The Jakarta Post)
Jakarta
Sat, October 1, 2011

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Census kicks off at malls without store owners

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fter the new government tax census program had initially been announced, many expected it would incorporate a greater number of taxpayers in the tax data system in order for tax offices to improve monitoring of both paid and unpaid obligations.

However, when the nationwide census was officially launched at the Mangga Dua Square shopping center in Jakarta by Finance Minister Agus Martowardojo, Jakarta Governor Fauzi Bowo and Finance Ministry taxation director general Fuad Rahmany on Friday, some questioned whether their stated objectives could be achieved.

Many tax officials who had set out to conduct the census could not find shop owners at the mall, leading them to discuss their agenda and ask questions with storekeepers.

“We are only storekeepers. The boss is the one who will fill out the form,” said Ale, after being visited by tax census officers. Ale keeps a small shop in Mangga Dua selling goods to parents with toddlers.

An unidentified tax census officer said that there were shops that would not allow the officers to meet with the owners. “Some are covering up.”

The many graft cases at the tax office — which oversees trillions of rupiah of the country’s main source of state revenue — has created negative preconceptions among several potential taxpayers who fear they might be extorted. These perceptions have hindered Indonesia’s tax collection efforts for decades. The nation’s tax potential remains far from reaching its full potential as Indonesia’s tax to gross domestic product (GDP) ratio is reportedly as low as 12.2 percent versus over 20 percent in developed nations.

“I don’t mind paying taxes as long as my money won’t be corrupted,” said Lie Hong Yoe, who owns a clothing store at the shopping center.

Micro businesses, with revenues of below Rp 300 million per year, are subjected to 0.5 percent income tax, while small and medium enterprises, which are defined as those with revenues of between Rp 300 million and Rp 4.8 billion, have to pay 3 percent of revenues as income tax.

“Tax census officers should not scare off taxpayers. There needs to be a different approach,” said Indonesian Employers Association (Apindo) chairman Sofjan Wanandi, who also attended the tax census ceremony, calling for the government to improve the tax office’s performance.

That commentary was quickly responded to by Minister Agus, who vowed that “reform at the tax office will continue”.

Another shop owner at Mangga Dua, Budiman, whose doll store is located in front of the shopping center’s southeast entrance, was not interviewed because he had not been recorded by tax census officers.

Ale, Lie and Budiman were only a minute sample of the 1.5 million merchants targeted by the tax office in the remaining three months of this year, but their experiences raised concern that the huge potential of unregistered taxpayers who might not pay anything at all.

The census would be conducted by 3,000 tax census officers from 299 tax offices throughout Indonesia throughout the end of next year, prioritizing “economic centers, business districts, high-rise buildings and premium housing complexes”.

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