[nasional_list] [ppiindia] Fwd: Korupsi Berjamaah di Kantor Pajak : Special Report The Jakarta Post
- From: Nugroho Dewanto <ndewanto@xxxxxxxxxxxxxxxx>
- To: ppiindia@xxxxxxxxxxxxxxx, ajisaja@xxxxxxxxxxxxxxx, tempo@xxxxxxxxxxx
- Date: Thu, 19 Jan 2006 17:10:03 +0700
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>
> >From Special Report The Jakarta Post, Jan 18, 2006.
>
>
>I. Superiors put young tax officials on road to perdition
>
>
>"Ali" never forgets the day five years ago when his moral purity as a
>devoted Muslim and a professional tax official collapsed before a
>pile of cash offered by his corrupt supervisor.
>
>With a monthly salary of around Rp 700,000 (US$74) at that time, Ali
>says he had no other choice but to accept the money -- about Rp 25
>million -- if he was to be able to support his poor and ailing
>parents.
>
>"My faith was only able to prevent me from accepting money during my
>first year in the tax office. During the second year, I could not
>bear it any longer as the environment forced you to become one of
>them (the corrupt officials)," recalled Ali recently.
>
>As a gifted accountant who graduated from state-run accounting
>academy STAN, it is not difficult now for Ali to illegally squeeze
>between Rp 300 million and Rp 500 million annually out of corporate
>taxpayers in Jakarta.
>
>Unlike his colleagues, who mostly live in luxury homes in Kebayoran
>Baru, South Jakarta, Ali prefers not to display his wealth and lives
>in a relatively modest house on the outskirts of Jakarta.
>
>Since an article revealed that a corrupt tax official could afford to
>buy a new series of BMW sedan after just two years in the tax office
>was published in 2004, most tax officials in Jakarta have tried to
>conceal their ill-gotten gains by riding motorcycles or public
>transportation to work.
>
>"They usually display their wealth after office hours. They go to
>malls with their families in Toyota Alphards or go on overseas
>vacations," said "Andreas", an auditor in a tax office handling
>corporate taxpayers in Jakarta.
>
>Superiors use various ways to turn idealistic young people freshly
>graduated from college into crooks, including treating them at fancy
>cafes, karaoke parlors and discotheques, in order to get them
>addicted to the high life.
>
>"Once addicted, we have to seek "extra income" to make up for our low
>salaries. For those not partial to the high life, their superiors
>offer money at times when they have a lot of expenses, such as around
>the time of a birth or illness, or to help with their children's
>education," said Ali.
>
>Those officials who remain honest will be condemned to spending their
>entire careers as clerks doing petty and humdrum work.
>
>"It is not actually our fault that we get immersed in this depravity.
>Neither should my school, STAN, be blamed for this. It is our corrupt
>superiors and the overall system in the tax office that causes it,"
>said Ali.
>
>Funds garnered illegally from taxpayers in Jakarta are normally
>distributed within the tax office, with the collector getting 10
>percent, the coordinator 15 percent, the section head 20 percent and
>the office head 45 percent, with the remaining 10 percent being used
>for petty cash purposes.
>
>"Previously, the tax collector got 25 percent and the tax office head
>30 percent. But due to the plan to overhaul all the tax offices in
>Jakarta, the bosses want a bigger share before they run out of shots.
>They refer to the period we are going through at the moment
>as 'injury time'," said Ali.
>
>At local tax offices around the country, and in the Directorate
>General of Taxation itself, the split is more or less the same.
>However, the methods of collecting the money are more complicated,
>and are well-nigh untraceable except by specialist accountants.
>
>Tax officials who pay more money to their supervisors are rewarded
>with plum postings where they can make more money than ever.
>
>There is also an unofficial "association" made up of section heads
>responsible for collecting income tax from corporate taxpayers in
>Jakarta, whose task is to pool the illegally garnered funds for
>strategic purposes, such as helping ensure the passage of the new tax
>law amendment bills.
>
>"The money is no longer paid out hierarchically (from the lower level
>offices up to the higher level offices). This is to reduce the risk
>of senior tax officials being caught. The funds are now transferred
>through the association," said Andreas.
>
>The money is also used to finance the annual celebration of Financial
>Day, charitable work with orphans, taxation-related events at the
>Presidential Palace and the Independence Day sports competition for
>officials of the Finance Ministry. -- Rendi Akhmad Witular
>
>
>
>II. Massive overhaul needed to root out graft in tax service
>
>
>Rendi Akhmad Witular, The Jakarta Post, Jakarta
>
>"Jono" is a junior official in an East Jakarta tax office, and
>regularly parks his silver BMW sedan, which he drives from his luxury
>home in Cibubur, Bogor, at his friend's house in Jakarta before
>riding a Honda scooter on the last leg of his journey to work.
>
>Although possessing only a high school diploma, Jono well understands
>that he needs to avoid arousing public suspicion over the wealth he
>has gained from falsifying tax documents and claims for value-added
>tax (VAT) refunds.
>
>Jono readily admits he has been involved in this dirty work for more
>than five years, inflicting estimated losses on the state of around
>Rp 14 billion (US$1.48 million).
>
>While his case is just the tip of the iceberg, it highlights how the
>cancer of corruption has spread throughout the Directorate General of
>Taxation.
>
>At a time when the government is in dire need of money to provide
>adequate public infrastructure and services, the relevant ministers
>and officials in the economic ministries seem helpless to stamp out
>the graft.
>
>With the tax directorate general tasked this year with collecting Rp
>362 trillion ($38.51 billion) in taxes, and a plethora of reports on
>corruption, the warnings from analysts that leakage of tax revenue
>may amount to many trillions of rupiah annually need to be heeded by
>all.
>
>An internal report obtained by The Jakarta Post recently from a tax
>office shows Finance Ministry's Inspectorate General has identified a
>variety of corruption methods and causes.
>
>However, it remains unclear why the report has not been acted upon to
>prevent corruption in the tax service, nor why it has not been taken
>into consideration during the drafting of the recent tax law
>amendment bills by the government.
>
>Representatives of the Indonesian Chamber of Commerce and Industry
>(Kadin) who were involved in drafting the amendments seem to have
>missed the big picture by merely focusing on technical matters, such
>as tax rates and procedures.
>
>As highlighted in the Inspectorate General's report, corruption in
>the tax service occurs primarily because of the service's excessive
>powers, including its power to set tax policy, collect taxes and
>supervise tax collection.
>
>Tax analyst Munir M. Ali of the University of Indonesia said the
>spiraling corruption in the tax service had long been obvious. The
>spread of the cancer was helped by the fact that the service was
>structured in such a way that it left no room for balance or the
>sharing of rights.
>
>"Everybody should be blamed for making the directorate general
>excessively powerful, thus opening the way for its officials to abuse
>their powers. Whoever the tax chief is, corruption will continue
>unabated unless the service's powers are reduced," he said.
>
>Munir suggested the government and legislature start stripping the
>service of some of its powers by separating the functions of policy-
>making, tax collection and oversight during the upcoming
>deliberations on the tax law amendment bills.
>
>Among the laws to be amended are Law No. 16/2000 on general taxation
>arrangements and procedures, Law No. 17/2000 on income tax and Law
>No. 18/2000 on VAT and luxury goods tax.
>
>"Our fiscal incentives and tax rates are fairly competitive
>worldwide, on average. But investors are still reluctant to come here
>because of the poor implementation of the tax laws, which leads to a
>high-cost economy and uncertainty," said Munir.
>
>"China has the highest tax rates in the region, but investors are
>still going there as they feel comfortable with the tax regime,
>despite the high rates. This shows that lower tax rates and good
>incentives will not count too much in the absence of a good system,"
>he said.
>
>Lack of transparency is also blamed for corruption in the tax
>service, with the tax legislation providing little in the way of
>rights for taxpayers to seek clarifications or explanations regarding
>the calculation of their tax bills.
>
>The legislation only gives the taxpayer the "opportunity" to seek
>such information, instead of conferring a "right" on them to do so.
>This gives excessive discretion to tax officials in calculating the
>amount of taxes owed.
>
>Another concern is the numerous "gray areas" in the tax legislation
>that are subject to differing interpretations between tax officials
>and taxpayers, thus opening the way to bargaining, collusion and
>extortion.
>
>As things stand at the moment, there is no institution that is
>capable of resolving taxpayer complaints independently, because the
>existing tax tribunal does not come under the auspices of the Supreme
>Court but rather the Finance Ministry, with the judges' salaries
>being paid by the ministry.
>
>Taxpayers are often reluctant to appeal to the court as they are
>required to pay 50 percent of their alleged tax arrears before the
>court will hear their cases, which can sometimes prove to be
>burdensome.
>
>"If the government is unable to immediately overhaul the tax service,
>it could instead speed up the establishment of modern tax offices
>applying the system currently employed by the Large Tax Office, which
>has proven itself to be clean and effective, said Munir.
>
>
>III. Graft methods uncovered
>
>
>A report prepared by the newly established investigative division of
>the Finance Ministry's Inspectorate General shows that there are
>various methods regularly used by tax officials to pillage potential
>tax revenue.
>
>The report, a copy of which was obtained by The Jakarta Post, is
>based on an investigation conducted in 2005 in response to public
>complaints.
>
>The first and simplest method involves collusion between tax
>officials and businesspeople in recording fictitious transactions
>purporting to show that the companies have credited their value-added
>tax to the tax office, which can be refunded afterward.
>
>The method is more or less similar to those used in a recent high-
>profile scam involving collusion between businesspeople and customs
>and tax officials for the issuance of falsified export documents and
>the claiming of refunds from the Pademangan tax office in North
>Jakarta.
>
>Based on the Inspectorate General's report, preliminary evidence was
>found suggesting the involvement of 30 tax officials in this kind of
>scam last year, with state losses estimated at around Rp 28.5
>billion. The investigation excluded the Pademangan case.
>
>"This method is not a typical scam by tax officials. It is not that
>complicated and the proceeds are not so huge compared to other, more
>complex methods. This is usually done by junior and less-skilled
>officials," said an auditor with a Jakarta tax office.
>
>The Inspectorate General also found a more complicated scam in which
>taxpayers and tax officials colluded in falsifying tax payment
>documents, including tax transfer certificates (SSP) and tax transfer
>certificates for property and buildings (SSB).
>
>With these, taxpayers can evade paying taxes but still obtain a legal
>proof of payment. The collusion also involves the falsifying of bank
>deposit certificates in order to lower tax bills.
>
>Based on its investigation. the Inspectorate General identified 12
>tax officials involved in such cases last year, with the state likely
>suffering at least Rp 24 billion in losses.
>
>The favorite method employed by tax officials, however, is simple
>extortion. The officials intentionally inflate the amounts owed by
>taxpayers in order to push them to file a complaint with the tax
>tribunal.
>
>But under existing regulations, they cannot file a complaint unless
>they have paid 50 percent of the inflated arrears. Given the huge
>cost of going to the tribunal, taxpayers are often reluctant to seek
>redress there.
>
>Those who are unable to pay 50 percent of their assessed arrears have
>no alternative but to seek a compromise with tax officials by paying
>bribes, which, according to the report, could amount to between 10
>percent and 50 percent of the inflated tax assessments.
>
>Other favorite methods used by tax officials to feather their own
>nests include reducing tax assessments in return for bribes, or
>threatening to hold up a tax rebate for years unless money is handed
>over.
>
>The Inspectorate General's report found that 40 tax officials were
>involved in such practices last year, with the potential losses to
>the state yet to be calculated. -- Rendi Akhmad Witular/The Jakarta
>Post
>
>
>IV. Systemic corruption's deep roots in tax service reach nationwide
>
>
>The city of Probolinggo is one of the poorest areas on the north
>coast of East Java, with the municipal administration only taking in
>Rp 16.31 billion (US$1.73 million) in revenue in 2003 and the average
>monthly income being less than Rp 500,000 per capita.
>
>But the situation has not deterred tax officials in this city from
>blackmailing some corporate taxpayers, despite the fact that they
>could help lift local people out of poverty, and colluding with
>others to ensure lower tax bills in return for bribes.
>
>Based on a report from the investigative division of the Finance
>Ministry's Inspectorate General -- a copy of which was made available
>to The Jakarta Post -- eight officials, including the local tax
>office head, are suspected of involvement in corruption.
>
>The investigation started in March 2005 after the division received a
>report from the Office of the State Minister for Administrative
>Reforms to the effect that the local tax officials had inflated the
>real amount of income tax owed by a local Chinese-Indonesian
>businessman.
>
>For spurious reasons, the businessman was told he had to pay Rp 125
>million (US$13,300) in income tax. But the amount could be
>drastically reduced if he agreed to pay the officials a bribe of Rp
>35 million.
>
>Unable to come up with the money, the businessman later tried to
>negotiate with the officials to get the bribe reduced to Rp 5
>million -- the normal amount paid by his fellow businessmen. The
>offer, however, was rejected by the officials.
>
>Worried that the tax office would make things difficult for his
>business, he then reported the officials to a number of agencies,
>including to the Corruption Eradication Commission (KPK) and the
>police.
>
>After an investigation by the Inspectorate General was launched, and
>eventually expanded to other cases, preliminary indications were
>found that the officials regularly demanded and accepted bribes from
>local businessmen to reduce their tax bills or help get them out of
>difficulties.
>
>It was discovered out that the officials received between Rp 250,000
>and Rp 8 million for every "service" they provided.
>
>There was even an official who acted as a tax "broker"
>and "consultant" for 80 local taxpayers, mostly gold traders in a
>traditional market, in order to help them evade their taxes.
>
>Probolinggo tax office head A. Sjarkowi could not be contacted by the
>Post for confirmation as he was on the haj pilgrimage in Saudi
>Arabia.
>
>Another official named in the report, Achmad Dimyati, refused to
>comment, saying that he was not authorized to discuss the case
>publicly.
>
>It is still unclear whether the Directorate General of Taxation has
>taken any action against the officials.
>
>The directorate has, however, sent a copy of the report to every tax
>office in the country. This is now being used by other officials to
>avoid being caught in connection with such "trivial" cases.
>
>"Tax officials are reading the report to improve their corruption
>skills. It is actually a petty case and is not that complicated. But
>it shows that we should not make any errors when dealing with similar
>cases in the future," said a tax official.
>
>The report shows that corruption in Indonesia's tax offices is not
>the result of the actions of unscrupulous individuals, or oknum as
>they are known here, but rather is systemic in nature and involves
>officials from the lowest to the highest levels.
>
>A senior official in the Inspectorate General said that the
>Probolinggo report and other cases investigated by the inspectorate
>highlighted how corruption in the tax service was deeply
>institutionalized.
>
>"The report shows that corrupt tax officials are no longer out of
>reach of the authorities. Similar cases have also occurred in other
>tax offices. This case merely reflects this," said a senior official
>in the Inspectorate General.
>
>The inspectorate recently uncovered a corruption case in a tax office
>in Lampung's capital, Bandar Lampung, in which 19 officials have been
>implicated, including the tax office head. Potential state losses are
>believed to run to Rp 9.8 billion. -- Rendi Akhmad Witular
>
>
>V. Tax chief says graft the work of individuals, not the institution
>
>
>Hadi Purnomo has served as director general of taxation for five
>years now. However, the flood of allegations of corruption involving
>his officials is far from abating, with the police now investigating
>several scams in the directorate general.
>
>To seek clarification about the allegations and to ascertain his
>strategy for reducing corruption in the tax service, The Jakarta Post
>recently interviewed Hadi, who has worked in the service for more
>than 25 years.
>
>The following are highlights of the interview:
>
>What do you say about the recent report from the Inspectorate General
>on indications of systematic graft in a number of tax offices?
>
>We should look at these case by case. You should not generalize it as
>though we (tax officials) are all corrupt. While I admit that there
>are systematic cases, there are also specific ones.
>
>The corruption occurred not because of weak supervision but more
>because of a lack of coordination and integration between the
>relevant government agencies and the private sector. This problem has
>resulted in our data monitoring being deficient.
>
>If our data monitoring was more comprehensive, there would no longer
>be anything to hide. After we know the amount of money you have, you
>will not be able to get away from us. So there should be a link and
>match between institutions.
>
>Several methods of corruption have recently been uncovered by the
>inspectorate general. Are they really true?
>
>I don't know exactly. But they could be true. We are evaluating every
>case and seeking solutions to prevent similar cases from happening in
>the future.
>
>How do you fix the system, then? Do you need to increase the salaries
>of tax officials?
>
>We are always improving our systems and management. The problem is
>not about our small salaries, but more about the reasons I've just
>mentioned, and also the existence of a number of conflicting
>regulations.
>
>Many say that you are very powerful and prone to abusing your powers.
>What are your comments on this?
>
>Who and what is powerful? Some of our powers have already been taken
>over by the Ministry of Finance.
>
>Is it true that there is an institutionalized system for transferring
>illegally obtained funds among your officials?
>
>I think it is individuals who are doing this, not the system. Anyway,
>there are no such transfers. If there are, please give us the
>evidence. It is not part of our system. Please don't generalize it as
>though all tax officials are corrupt. We have 32,000 employees.
>
>Why is the overhauling of the tax offices in Jakarta taking so long?
>Is it because of opposition from officials and a desire to maintain
>the status quo?
>
>The overhaul, which involves applying the system currently run by the
>Large Tax Office (LTO), cannot be expedited up as we don't have
>enough money for this. Money is needed to provide the equipment and
>for human resources purposes (tax officials in the LTO receive higher
>salaries than those working in ordinary tax offices).
>
>Our target is to have modernized all tax offices in Jakarta by 2009.
>But we will try to speed up the process next year.
>
>There is no opposition from within the tax directorate general. We
>are committed to eliminating corruption. But this must be done
>systematically rather than on a case by case basis.
>--Rendi Akhmad Witular
>
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>Klik: http://mediacare.blogspot.com
>
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>
>
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- » [nasional_list] [ppiindia] Fwd: Korupsi Berjamaah di Kantor Pajak : Special Report The Jakarta Post
