The Corruption Eradication Commission (KPK) was previously reported to have named a high-ranking official at the Directorate General of Taxes (DJP) of the Ministry of Finance (Kemenkeu) as a suspect in the tax bribery case. The determination of the suspect was carried out in a bribery case related to tax payments that had been made by a number of companies, while the mode and purpose of this bribery was to ease the payment of corporate taxpayers. In this regard, on March 3, 2021, the Ministry of Finance carried out media conference related to the alleged acts of corruption that have been committed by its employees. Sri Mulyani said that the Ministry of Finance appreciates and fully supports the cooperation of the KPK and the Internal Compliance Unit at the Ministry of Finance which has followed up on public complaints related to alleged corruption crimes committed by unscrupulous DGT employees, together with the Taxpayer's attorney (WP) or his tax consultant at tax audits. 2016.
"Appreciation to the KPK and the Ministry of Finance for showing their commitment to eradicating tax corruption. In the midst of the Covid-19 pandemic where state revenues have decreased sharply, the corrupt behavior of tax officials will certainly result in a loss of potential state revenue for handling Covid-19 and result in disappointment for taxpayers or the public at large. Tax officials who carry out corrupt practices must be severely punished so that the trust of taxpayers is maintained," said Ah Maftuchan, Executive Director of The PRAKARSA.
Tax challenges in the future will be more complex, both internally and externally. Slowing economic conditions due to the pandemic and business changes due to the digital revolution must be the main concern of the Ministry of Finance and DGT. Setting up well-managed institutions and building tax officials with integrity will be the key to optimizing sources of state revenue, including in the digital economy sector. “Reforming tax governance and increasing the integrity-capacity of tax officials must be prioritized. In order to strengthen the governance and integrity-capacity of tax officials, the Ministry of Finance needs to involve the participation of community organizations in supervision,” said Maftuchan, who also serves as Coordinator of the Indonesia Fair Tax Forum (FPB).
Budget and tax policies are important fiscal instruments to finance development, promote prosperity and redistribute resources to reduce poverty and inequality. "Tax ratio Indonesia in recent years is far from its potential. Some of the causes include the widespread practice of profit-shifting and illicit financial flows by corporations for tax evasion. This is due to weak regulations and weak capacity of tax officials to address tax evasion practices. On the other hand, the expansion of the tax base is still not optimal, for example the taxation of digital business activities and the expansion of excisable goods," added Panji TN Putra, an economist at The PRAKARSA.
Study results PRAKARSA tentang illicit financial flows (2019) of Indonesia's 6 leading export commodities (coal, palm oil, copper, rubber, coffee and crustaceans) shows that the potential loss of state revenue is very large. This shows that the tax authorities are less than optimal in handling tax evasion-avoidance practices. “During 1989-2017, illicit financial flows entered (over invoice) of the six leading export commodities reached 101,49 billion USD. While illicit financial flows out (under invoice) reached 40,58 billion USD. Based on illicit financial flows in and out, Indonesia's potential tax revenue loss during this period amounted to USD 11,1 billion. Practice under-reported also causes the potential loss of state revenue (royalties) reaching 2,3 billion USD in coal commodities and 569 million USD in copper commodities during 2000-2017," added Herawati, an economist at The PRAKARSA.
Prakarsa realizes that the taxation system in Indonesia should be a tool to distribute economic benefits that can be enjoyed fairly by all citizens without exception. The series of cases of tax fraud in the tax authorities should make the government rush to reform the tax system that is more accountable, transparent, fair and participatory.
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