Monday, April 2, 2012

Tax office eyes big fish to meet this year’s Rp 1,000 T target

The tax office aims to hunt down oil and gas, coal, and crude palm oil (CPO) companies who are not paying tax in order to achieve the government tax revenue target of more than Rp 1,000 trillion (US$109 billion) this year, officials said on Tuesday.

The Finance Ministry’s director general for taxation, Fuad Rahmany, said his office would increase supervision of major tax paying sectors, including mining, oil and gas, and CPO, so that the hefty profits and sales that the companies made translated into income and value- added taxes.

“One of the breakthroughs is that we will use a surveyor so that volumes of production, exports and sales can be calculated accurately. We will also prepare tax branches specifically designated to handling sectors like mining, coal, CPO, oil and gas,” he told a press briefing.

There are 9,000 businesses in the mining sector of Indonesia, which is the world’s largest exporter of coal and CPO, Fuad said, adding that without the help of the surveyor, the tax office’s database would not be sufficient to check the accuracy of sales and income data that the companies filed to the tax office.

“In accordance with the law, we have adapted a self-assessment taxation method, and therefore we should know if taxpayers are accurately declaring their income and sales,” he added.

Indonesian Employers Association (Apindo) Sofjan Wanandi said that the so-called “illegal” mining firms had a total combined output of between 40 million to 50 million tons, indicating the tax office’s
untapped potential.

“We all know that there are many mining firms that do not pay taxes. As long as the tax office’s plan are carried out fairly and all pay their taxes accordingly, we support the office and will help ease their work with our networks,” he said.

“Efforts need to be made to make sure that the government collects its revenue so that the funds can be used to speed up infrastructure development.”

The notoriously corrupt tax office is currently undergoing massive reform following the high-profile case of graft convict Gayus H. Tambunan, who took bribes from corporations to help them illegaly revise down their tax obligations.

The tax office has also planned incentives for smaller businesses to make them pay their taxes, and focus on collection from small and medium enterprises (SMEs) this year, said Syarifuddin Alsjah, a director of taxation regulation.

“There are plenty of SMEs; there are millions of them, but the contribution to taxation is still low because they have been treated like regular taxpayers, like in the mining sector. This complicates small and medium business players,” he said.

The new regulation on taxes for SMEs is still being finalized, Syarifuddin said, but officials have planned a 2 percent annual income tax for businesses with revenue of between Rp 300 million and Rp 4.8 billion, while those with revenue of less than Rp 300 million will be charged 0.5 percent.

Only 466,000 firms of the 12.9 million active businesses and 22.6 million total enterprises in the country paid their taxes in 2010. On the individual taxpayer front, 8.5 million people paid their taxes last year, compared with 110 million active workers and a total population of 240 million.

The number of taxpayers is expected to top 40 million by 2014 from almost 22 million in 2011.

The tax census, launched at the end of September last year, will visit 2 million to 4 million potential taxpayers this year despite technical issues ranging from staff performance and excuses from taxpayers to avoid census agents, such as citing bad weather, Fuad said. He said he expected 2.5 million new taxpayers in 2012. “To reach the very high tax revenue target of Rp 1,032 trillion, we need more taxpayers,” he added.


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