Yet more worrisome is that the findings seem to only be the top of the iceberg.

The latest scandal should understandably shock Finance Minister Sri Mulyani Indrawati, who in early 2010, in her capacity also as the finance minister at that time, instituted a series of draconian measures to reform the tax directorate’s internal control and compliance directorate to detect any malfeasance early on.

She ordered senior tax officials to allow her to check their tax payment records, bank accounts and asset balance sheets, and those of their spouses, if necessary, to verify their wealth against their civil servant salaries. She even asked the Financial Transaction Reports and Analysis Centre (PPATK) to check money flows through the bank accounts of tax officials highly vulnerable to graft.

Involving the politically independent PPATK in examining tax officials’ bank accounts and then checking the accounts against the annual income tax returns filed by the officials could help uncover malfeasance and any ill-gotten wealth of officials.

Those radical measures were taken in early 2010 in the wake of several big tax scandals between 2008 and 2010 that implicated tax officials and involved the equivalent of millions of dollars in bribes. It was the PPATK’s reports on suspicious transactions through the bank accounts of tax officers that led to the unveiling of the corruption cases.

But the uncovering of the latest big corruption cases shows that the tax directorate’s internal control and compliance directorates, which should primarily be responsible for detecting any indication of graft early on, seem utterly incompetent.

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