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Fighting professional enablers, combating tax crime
Professional enablers play a core role in facilitating tax offenses and related financial crimes committed by others.
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Guilty as charged: Former tax officer Rafael Alun Trisambodo listens on Jan. 8, 2024 to the verdict from the panel of judges at the Jakarta Corruption Court. The defendant was sentenced to 14 years in prison for accepting gratuities and laundering money. (Antara/Hafidz Mubarak A)
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ast year, Indonesia’s tax landscape experienced a significant upheaval due to a high-profile case involving a former official from the Directorate General of Taxes (DGT) who was embroiled in a major corruption scandal. Last month, the court sentenced the ex-DGT official to a 14-year prison term.
This case uncovered a previously undisclosed nexus between a tax-consulting firm and officials at the DGT. The revelation has had a profound impact nationwide, sparking widespread concern due to the implication of potential collaboration between tax consultants and officials responsible for ensuring fair and proper tax practices.
The ramifications of this disclosure are far-reaching, as they unveil a possible erosion of trust and integrity of the tax system, a critical juncture that demands urgent attention and reform.
In response to this, Pahala Nainggolan, deputy of prevention and monitoring at the Corruption Eradication Commission (KPK), highlighted a crucial ruling. It explicitly states that tax officials in Indonesia’s DGT are not allowed to engage in private tax-consultancy work. This ruling is a clear part of ethical guidelines provided to DGT officers through Finance Ministry Regulation No. 1/2007. These guidelines serve as the code of ethics for officials of the DGT under the Finance Ministry.
However, the effectiveness of this ethical code raises a significant question as to whether it can genuinely deter DGT officials from engaging in any unauthorized activities they might be tempted to do.
This specifically relates to their potential involvement in prohibited private consultancy work, a role beyond their primary responsibilities at the DGT. It is crucial to underline that not only do such activities breach ethical standards, but they also risk classifying the tax officials as professional enablers.
"Professional enablers" may not have a one-size-fits-all definition, but it generally refers to individuals or entities with specialized knowledge who assist others in committing tax and financial crimes. The Organization of Economic Co-operation and Development’s (OECD) official report “Ending the Shell Game: Cracking down on the Professionals who enable Tax and White-Collar Crimes”, explains that professional enablers play a core role in facilitating tax offenses and related financial crimes committed by others.
