Thursday, 18 December 2014

TAX EXECUTIVE CANDIDATE MUST SYCHRONIZE LAW AND GOVERNMENT REGULATIONS



Soon the elected Director General of Tax would have his homework to synchronize Law on Taxation with Government Regulation and Regulation of the Minister of Finance [PMK] to learn experience from the case of outstanding tax of Asian Group [AAG]. The Tax Court put sanction on 2 AAG subdiary companies which was confessed by AAG as and inability to pay fine of AAG’s tax due. “The rule for sanction must be seen from the context of Law, PP and PMK. Sanction could be interpreted as ‘inhuman’ for the two companies.” Yustinus Pratowo, a tax practitioner disclosed to Business News [10/11].

Recently the Tax Court rejected judicial appeal in the case of outstanding tax of PT Rigunas Agri Utama and PT Raja Garuda Mas Sejati, both were holding companies. The total tax due of each company was Rp. 60 billion and Rp. 15.8 billion. Tax as a effort of Law enforcement. “The sanction is 2.5% of total debt. There is deterrent effect so the debitor would not repeat violation. The value of fine is the same as that for credit card interest, i.e. 24% per year which means it’s not reasonable. Supposedly AAG pays 400% of fine, while tax examination had been going on over the past 5 years. This could be regarded as over burden.”

Settlement for the case of tax as experienced by AAG could be by a simple way, i.e. by way of in stallment. Option two was that fine must be paid with company’s asset. Legal procedures must be clear in settlement application. Taxation could be more effective by way of simplification. “So verdict over cases, if there was no sign of crime, should not be by multi-interpretation. Under the State Court [PTUN] verdict could be more effective by way of putting administrative and legal sanction at the same time.”

Settlement of tax administration was also in line with good intention of Tax Subject so it would not lead to tax avoidance or even attempt of money laundering, Self Assessment System was a way of tax collection by way of authorizing taxpayer to self calculate, self report and self pay tax due. The Law of Taxation prioritized administrative process. From the very start could report and could correct in case of mistake in calculation. “After being checked and examined by official the taxpayer and there was evident violation the taxpayer would be exempted from charges of crime provided he pays 200% tax.”

In the case of AAG, the process of which had arrived at the stage of erdict by the Supreme Court of Justice [MA] was admittedly complicated. The case had been dragging on for years without any sign of wayout. The Tax subject through their Lawyer claimed they had repeatedly sent a letter to the manager Suwir Laut was reckoned not having any agreement in terms of the tax amount due. “This means there is no good intention of AAG. By MA verdict teger is no agreement to pay 400% fine. No agreement on loss account.”

The effort to simplify tax management within the context of Law Enforcement must be prioritized, so President Joko Widodo must reconsider the case, at least in the case of criteria for the candidate of Directorate General of Tax. The position of administrative settlement of tax and crime was the key word. In the case of AAG the Criminal Law followed the administrative process instead of the reserve.. “The root of problem is that there is no clarity in Article 13, what is defined as court justice and verdict by power.”

Meanwhile the Indonesian Legal Resource Center [ILRC] saw that the effort of Law Enforcement in cases of taxation, automatically bettered tax ration in Indonesia. State’s income could increase if tax ratio got close to ideal condition, so the process of Law enforcement should be fair. This was the chances taken by the Tax Dept. of the Ministry of Finance of the Jokowi administration. “The Tax Court must have the courage to reject Judicial Appeal for tax due by companies like AAG. As soon as there are evident of bad intention or irresponsibility, the Law must be enforced without discrimination” Chairman of ILRC Uli Parulian told Business News [10/11].

ILRC saw that AAG had been guilty of breaking the Law of Taxation by not giving the right information of their tax status, so fine was imposed to the amount of Rp. 2.5 trillion. By legal consideration and evident in MA verdict there were indications from TPPU. The tax aversion was by the method of terendus pricing transfer. Other tricks like transfer to other companies were also suspected. The alleged case of TPPU was not exercised as an effort of law Enforcement by DJP or PPATK. “We insist that the Dir. Gen. of Tax and PPATK immediately investigate suspected TPPU dane by AAG. This is in line with verdict of Tax Court who rejected judicial appeal by 2 AAG companies.” (SS)

Business News - November 14, 2014

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