Tjiptardjo: JP/Ricky Yudhistira

Newly appointed tax chief Mochamad Tjiptardjo already has a tough job ahead of him to continue the considerably successful internal reform of the tax office, but his past track record may shroud his efforts to act tough against colleagues entangled in graft.

Tjiptardjo, formerly director of intelligence and investigation at the Finance Ministry's Directorate General of Taxation, was officially sworn in Tuesday to replace Darmin Nasution, who was named Bank Indonesia senior deputy governor.

The appointment of Tjiptardjo, a career tax official, is aimed at returning the reform movement to their own officials, Finance Minister Sri Mulyani Indrawati said in a speech during Tjiptardjo's inauguration.

"Pak Tjiptardjo's appointment isn't based on his personal achievements, but rather from the fact he represents a generation of tax officials who for the most part hold crucial posts," he said.

"This is more a chance for his generation to control and implement the tax reform that has been carried out and received public appreciation under Darmin's leadership."

Tjiptardjo's generation, mostly tainted with allegations of graft since the Soeharto era, has two years left to manage the tax office.

Analysts have called for a reform-minded tax chief to continue the current reforms, especially over the integrity of tax officials.

They warn a failure to pick a committed tax chief could break the already high-cost reform in the agency, which now pulls in 70 percent of state revenue.

They also point out President Susilo Bambang Yudhoyono and Mulyani seem fully aware of the risk of selecting an inside figure to lead the reform, regardless of what critics say is the longing of most tax officials for a return to the old days when they could easily collude with taxpayers in return for hefty gains.

Tjiptardjo, with a personal wealth of Rp 7 billion (US$700,000) as of 2007, as reported to the Corruption Eradication Commission (KPK), was once mired in an alleged scam over the sale of state land to a businessman in Palembang in 2004, when he served as regional head of the Southern Sumatra and Bangka Belitung Islands tax office.

As reported at the time, Tjiptardjo's role in the case was to determine the taxable value of property (NJOP) used to set the benchmark price for the sold land, with a South Sumatra prosecutor accusing him of undervaluing the NJOP. The lower the NJOP, the cheaper the land.

Tjiptardjo rode out the allegations, however, after a court acquitted the main suspect, the then Palembang Land Agency head Nasiruddin, of all graft charges in 2005.

Prosecutors are still awaiting the outcome of an appeal filed with the Supreme Court.

The KPK also tried, unsuccessfully, to probe the case in 2006, and have questioned Tjiptardjo as a witness.
"The allegations against me aren't true; the case has been settled," he said after the inauguration.

A high-ranking source at the tax office said it would be difficult for the public to expect a career tax chief to have a "clean white sheet", particularly if they were from an older generation.

"What's important is to expect them to be committed to the reform and put aside the past," the source said.

Corruption has since the 1970s been an almost indelible feature of the tax office and customs and excise office, until Mulyani adopted sweeping reform measures in mid-2007 to root out corruption for good.

Critics say it may be difficult for Tjiptardjo to keep up the efforts, particularly if he has to act tough against colleagues with whom he has built strong relations.

In her speech, Mulyani asked Tjiptardjo to commit to the reward-and-penalty mechanism now in place at all levels within the tax office, to ensure the reforms keep on rolling.

"Pak Tjiptardjo will face a harder task," she said.

"As an outsider, Pak Darmin's job was easier because there were no personal attachments. But you are from inside the office, having lived and built your career together, and forging friendships.

"It is my hope you can consistently guard the reforms."

Tjiptardjo's profile

Born:
April 28, 1951, in Tegal, Central Java
Career:
• December 2006 — July 2009: Director of investigation and intelligence
• 2002—2006: Head of Southern Sumatra and Bangka Belitung Islands regional tax office
• 1999—2001: Head of North Sulawesi and Central Sulawesi regional tax office
• 1997—1999: Director of planning and tax potency
Education:
• Master of Arts in Economics, Williams College, Massachusetts, United States, 1984
• Institute of Finance (now STAN), 1979

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