“An oath becomes ironic when we face a situation in which officials in the ministry and tax office have clearly shown that they betrayed their oaths,” said Sri Mulyani, upset by the recent arrests of a tax official in Jakarta in a bribery case and an excise official in Semarang in an illegal levy case.

It was not the first time she expressed “disappointment” over the recent events, having previously taken to social media to express words of encouragement for all ministry staff.

“This disappointment must fuel better work and hard work. We will together cleanse the Finance Ministry of elements that have tarnished the good name and reputation of our institution,” the minister wrote in a notebook, a picture of which was posted on her Instagram account recently. “We can all fight corruption!”

To show the government means business with tax reform, Sri Mulyani installed two high-ranking tax officials, Harry Gumelar as director of internal compliance and personnel resources transformation and Peni Hirjanto as director of taxation intelligence.

The ministry is also preparing a special team for tax reform that would be the first step toward an upcoming full-fledge revision of the nation’s General Taxation System (KUP) Law, which may result in Indonesia having a powerful tax agency similar to the United States’ Internal Revenue Service (IRS) to improve tax collection.

However, amid legal cases implicating ministry officials, Sri Mulyani said the government would review the law revision — which would see a powerful state revenue agency take over the role of the ministry’s tax office in 2018 — to detect weaknesses in the tax agency to avert potential misconduct in the future.

Tax reform is high on the priority list of Sri Mulyani, labeled by many as a tough reformist, to bring about trust from taxpayers, which is eventually hoped to boost the nation’s stubbornly low-tax base. At around 11 percent, Indonesia’s tax-to-gross domestic product (GDP) ratio is one of the lowest among its Southeast Asian peers.

While the newly installed officials took their oaths on holy books, Sri Mulyani reminded them of a number of articles in the civil servants’ oath, including the prohibition of accepting any reward outside their salaries and bonuses.

“A violation of oath hurts our institution because we hold the symbol as the guardians of state finance. That is the value that we show everywhere in our office, such as on posters and even in almost all elevators in the building,” said Sri Mulyani.

Newly inaugurated echelon II official Harry Gumelar will be responsible for improving the tax office’s internal compliance, which is part of a division working specifically on internal transformation, including the revamping of its IT system.

“The transformation division was formed in 2007 under Pak Darmin Nasution [former director general of taxation] when Ibu Sri Mulyani was previously finance minister,” he said.

The recent arrest of a subdirectorate head at the Directorate General of Taxation for allegedly accepting US$148,500 in bribes from a businessman to help his company evade tax arrears is not the first allegation lodged against a tax official. Years ago, the public condemned Gayus Tambunan, a convicted former tax official who is currently serving a 30-year prison sentence for bribing law enforcers to falsify passports.

The recent case is feared to negatively affect public trust toward the tax authority, experts say, although they believe the case will serve as a reminder for civil servants to abide by the law.

“There should be a clear road map for tax reform, as well as firm law enforcement,” said Yustinus Prastowo, executive director at the Center for Indonesia Taxation Analysis (CITA).

Popular

Weakened rupiah disrupts business, education plans

1998 redux?

Prabowo's rare address raises political concerns