A

politically charged disciple of the old guard at the tax office was inaugurated on Tuesday to lead the powerful agency, which is set to point its gun at wealthy individuals to meet its arduous tax collection target.

Finance Minister Bambang Brodjonegoro swore in career tax official Ken Dwijugiasteadi as the new director general of taxation three months after previous tax chief Sigit Pramudito resigned after failing to increase tax revenue by the targeted 30 percent.

Ken vowed after the inauguration that his leadership would be defined by the forcing of wealthy individuals to comply with tax regulations as instructed by the ministry, which sought to at least double the Rp 9 trillion (US$676 million) in income tax collected from individuals last year.

He reasoned that only 27 million people payed taxes out of 129 million people categorized as middle and upper class, and that income taxes from individuals currently accounted for less than 1 percent of total tax revenue.

'€œWe already know the identity of the wealthy individuals. We will send warning letters and provide them with enough time to pay their dues,'€ he said.

'€œWe will also check their banking records, and match them with their wealth as reported [to the tax office]. If we find discrepancies, we will summon them,'€ said Ken when questioned on his policy for tracking down the recalcitrant taxpayers.

Minister Bambang instructed the tax office and its 32,000 personnel to bank on the compliance of individual taxpayers to help it meet the target of Rp 1.36 quadrillion in tax revenue this year, 13 percent higher than last year'€™s total.

The tax target accounts for around 70 percent of total state revenue.

'€œThere should be stern action from the tax office to improve revenue from such taxpayers,'€ said Bambang, adding that taxes from wealthy individuals could help offset the decline in taxes paid by companies due to the slowing economy.

'€œI instruct Pak Ken once again to direct his personnel at every level to go after individual taxpayers to expand our tax ratio,'€ he said.

Indonesia'€™s tax ratio stands at 11 percent, lower than the 13 or 14 percent recorded by its ASEAN peers Singapore, Malaysia and Thailand.

The instruction to go on the offensive is likely to spook many parties, particularly when Ken is not unstained by controversy.

In 2006, then tax chief Darmin Nasution, now coordinating economic minister, assigned Ken to the less prestigious job of head of the East Kalimantan tax office after finding masses of fictitious tax registration numbers (NPWP) on record at the office'€™s information and IT division where Ken was in charge at the time.

In a hearing with legislators in September 2006, Darmin said that of the 10 million NPWP reported by his predecessor Hadi Poernomo to then president Susilo Bambang Yudhoyono in 2005, only 3.6 million NPWP could be verified.

In 2010, Ken was back in the spotlight after Surabaya Police in East Java nabbed five officials at his office for tax fraud that caused Rp 350 billion in state losses.

In his defense, Ken said at the time that the officials had committed an ordinary crime not a tax crime and their actions were thus outside of his supervision.

Ken, who reported Rp 3.25 billion in personal wealth to the Corruption Eradication Commission (KPK) in 2013, is known by many tax officials to have many friends in high places.

As a disciple of Hadi Poernomo, Ken has close ties with many politicians of the ruling Indonesian Democratic Party of Struggle (PDI-P), with State Enterprises Minister Rini Soemarno and with senior Golkar politician and House Speaker Ade Komarudin.

Hadi served as tax chief between 2001 and 2006, under former president Megawati Soekarnoputri and during the first two years of Yudhoyono.

During his leadership, Hadi was the subject of intense criticism and was blamed for taking the tax office into the '€œdark ages'€ in terms of integrity.

His rule was ended by the reform-minded then-finance minister Sri Mulyani Indrawati, who launched an overhaul of the agency.

Last year, Hadi was named a graft suspect by the KPK in connection with alleged tax crime involving Bank Central Asia (BCA), Indonesia'€™s biggest private lender. However, the South Jakarta District Court ruled in Hadi'€™s favor. The KPK is still awaiting the outcome of an appeal against the verdict at the Supreme Court.

Ken refused to comment on his past and his legion of powerful friends.
______________________

Date/place of birth: Nov. 8, 1957/Malang, East Java

Education: 1983: Bachelor of Economics from Brawijawa University
                  1991: Masters of Science in Tax Auditing at Opleidings Institute Financien, the Netherlands

Career:
 
Dec. 2015-Feb. 2016: Acting tax chief
July 2015: Finance minister expert staff for tax regulation and law enforcement
Nov. 2009: Chief of East Java regional tax office I
2006: Chief of East Kalimantan regional tax office
2003: Director for tax information and IT division
2000: Head of income tax for expatriates I
2000: Head of Bojonegoro tax office
1997: Head of tax inspection for Pekanbaru tax office
1992: Section head for individual tax payers at the Directorate General of Taxation
1989: Sub head for personnel division at Directorate General of Taxation
_______________________________________