The First Family's Tax Reports

President Soesilo Bambang Yudoyono (SBY) has frequently stated about the need for people to fulfill their tax obligations, and about the importance of transparency regarding the wealth of government/state officials.

That's why I was very surprised when The Jakarta Post reported about some discrepancies in the annual Tax Reports filed by him and his sons i.e. Major Agus Harimurti (Agus) and Edhie Baskoro (Ibas) for the year 2011 (below).

The paper wrote that the President's tax report mentioned that he earned Rp 1,37 Billion as President in addition to Rp 107 Million in income from Royalties. That year, SBY opened bank accounts worth 4.98 Billion and US$ 589.188 but there's no specific details for these funds.

Agus mentioned that his annual income as an Army officer is Rp 70,2 million, and he has 4 savings accounts at four different banks totaling Rp 1.63 Billion, but he did not give information about his or his wife's additional income. The total tax he paid amounts to Rp 2.7 Million.

Whereas Ibas mentioned that as a member of the People's Representative Council he earned Rp 183 Million. He also mentioned an investment in PT Yastra Capital worth Rp 900 Million, saving account of Rp 1,59 Billion, and cash money of Rp 1,57 Billion. However, he did not mention other sources of income like dividend, share etc.  The tax he paid : Rp 20 Million. Whereas his tax report in 2010 mentioned that his assets worth Rp 6 Billion including a car  Audi Q5 SUV worth Rp 1,16 Billion.

The Jakarta Post reported that President SBY has asked the Finance Ministry's Directorate General of Taxation to publicly address the above mentioned discrepancy allegations. 

In this connection, the Director General of Taxation Fuad Rahmany clarified that the President and his sons have met the required taxation administration procedures and have complied with the existing law and regulations. He said that there is no way that the President's family failed to properly fill in their tax report. Because they have a special team that thoroughly calculates their tax obligations to ensure accuracy.

The Sex & Business Activities of Gayus Tambunan

Former Taxman Gayus Tambunan was arrested by the Indonesian Police in Singapore and brought back to Jakarta at the end of May 2010.

Last May, the Jakarta High Court sentenced Gayus to ten years in prison for misuse of Taxpayers money, which is seven years higher than the sentence of the South Jakarta District Court.

In spite of the facts that I just mentioned, Gayus's life in prison is far from miserable, as a matter of fact he seemed to be having a good time and can get what he wants, including Sex and Business sctivities.

He was able to get his wife Meilana pregnant (6 months), which means that he can have sex while in prison, something that cannot be done by other prison inmates because our Prison Law does give possibility for prison inmates to have sex.

Further, he was also able to make a business deal with another prison inmate that caused him to suffer financial loss amounting to Rp 4 Billion. Which means that he can bring that amount of money to the prison, something that not many innocent people can do even outside prison.

The Ministry of Law and Human Rights which manage jails in Indonesia is currently investigating the above cases.

Too Many Foolishness

Today, 1 April, is widely recognized and celebrated as a day where many people play all kinds of jokes and foolishness.

The day is marked by the commission of good humoured or funny jokes, hoaxes, and other practical jokes of varying sophistication on friends, family members, teachers, neighbors, work associates, etc.

But unfortunately, unlike previous years, no one ever tried to tell jokes, hoaxes or surprised me today.

Maybe it is because people are too sick and tired with the so many funny, foolish, stupid and surprising things that have happened in our society recently, such as :
-  The House of Representatives' refusal to investigate the Tax Mafia Case.
-  The Indonesian Football Association (PSSI) leadership dispute
-  The on-and-off Cabinet Reshuffle
-  The unstable coalition government 
-  The House of Representatives' plan to build a very expensive new building

I hope that from now on there will not be to much fools in Indonesia, so that we can celebrate April Fool's Day again next year.

Tax Report

At 8 a.m this morning I went to the Kebayoran Baru Tax Office, South Jakarta, to submit my personal annual Tax Report.

Yes today, 31 March, is the last day for individual citizens and legal entities in Indonesia to submit their annual Tax Report. In this connection, The Jakarta Post reported that the Tax Office will be opened until 8 p.m tonight.

For me, submitting Tax Report is something special because by doing so I felt that I have fulfilled part of my obligations to my country, therefore give me the rights to demand and expect that things would be improved, among others by writing on this blog.

7 Years for Gayus Tambunan

 

Gayus Tambunan was a mid-level officer at the Directorate General of Taxation, but government officials, members of House of Representatives, and law enforcement agencies have been treating him as if he was the only person responsible for all the Tax Crimes in Indonesia.

Every day the media reported about him starting from his arrest by the Anti Mafia Task Force in Singapore, his rich bank accounts, expensive house and cars, his 68 trips inside and outside Indonesia while in Police detention center, trial at the District Court of South Jakarta, and the Prosecutors' demand for sentence of 20 years imprisonment for Tax Corruption charges.

But today, the Court's panel of judges seems to have their own opinion about Gayus when they sentenced him much lower than the Prosecutors' demand i.e. 7 year imprisonment and fine of 300 million Rupiah.

After the trial, Gayus told reporters that he was very disappointed at the Anti Mafia Task Force because they have turned him into public enemy number one, tried to persuade him and his wife to confess that he has helped the Tax fraud of companies owned by Chairman of Golkar Party Aburizal Bakrie, and that he has met him in Bali when he was detained by the Police.

He also accused the US intelligence agency CIA of arranging fake Guyana passports for him, his wife and children for the out of detention trips to Singapore, Malaysia and Macau. 

Considering that the sentence is much lower than what they have demanded and what have been expected by the public, most likely the Prosecutors would file an appeal with the Jakarta High Court against the District Court verdict.

Sources :
-  Gayus Praises Judges, Lashes Out at Task Force (The Jakarta Globe)
-  Gayus verdict disappointing: Graft Watchdog (The Jakarta Post) 

Photo: Courtesy of The Jakarta Globe

Why is Gayus so Strong ?

Former Tax officer Gayus Tambunan (31) is one of the most famous person in Indonesia today. This can be seen from the fact that his name and face appear on the media everyday.

                                          Credit : Wikipedia.

Besides, Gayus is also an influential person, this can seen from the fact that although he has been arrested by the Police since June 2010, but he was able to leave the detention center 65 times and free to go wherever wants to, inside and out side Indonesia using passport under the name of Sony Laksono.

 

                                           Credit: The Jakarta Globe.

The question is : why is Gayus that strong ?
Is it because he is a former officer of the Tax Office who has helped several big companies solve their Tax matters, and therefore got lots of money from them ?
Is Gayus being used to discredit the name of the Chairman of the Golkar Party Aburizal Bakrie, as owner of some of those companies ?

I shall be very grateful to hear your opinion about this.

Multiple Vehicles Ownership Tax

The condition of traffic in the city of Jakarta and vicinity is getting worse every day.

To solve this problem, the city government have limited the numbers of cars allowed to enter certain roads  during rush hours, built Toll-roads circling the city's inner and outer parts, built the Busway system, and asked schools to start half an hour earlier (from 7 am to 6.30 am). Unfortunately, those efforts  failed, and the city's traffic condition is getting worse.

Due to this fact, the city government plan to impose additional Tax to citizens who have more than one vehicle Please find below an article that I have quoted from AFP.

In this connection, I felt that the best solution would be to build a mass rapid transportation system i.e. by resuming the construction of the Mono-Rail system that was stopped many years ago start building subway system, and build many more roads.

Indonesia drivers face tax hike in bid to cut Jakarta jams

(AFP) – 8 hours ago

JAKARTA — Drivers in Jakarta are to face a rising tax bill for each vehicle they own from January in a bid to ease worsening traffic jams in the Indonesian capital, a spokesman said Tuesday.

"The Jakarta city administration will impose higher tax for owners of multiple motorised vehicles starting from January 3, 2011," Jakarta administration spokesman Cucu Ahmad Kurnia said.

"We hope the higher taxes will reduce traffic congestion as the number of vehicle users in Jakarta is already high. Hopefully, more people will use public transportation," he said.

The number of vehicles in Jakarta and its environs has almost tripled in the last decade to more than 9.5 million according to the Indonesian Transport Society.

Under the new rules, the present 1.5 percent tax level remains for the first car and motorcycle a person owns. This rises to 2.0 percent for their second, 2.5 percent for their third and 4.0 percent for every subsequent vehicle.

Authorities have been looking for ways to address problems in greater Jakarta, which has around 20 million inhabitants, including shifting the capital to a less populated area in the archipelago.

Experts predict the city, which has an ageing bus network and no underground train system, will reach total gridlock by 2014, with every main road and backstreet clogged with barely moving cars.

Drivers will see their costs rise further in March when the subsidy for petrol is cut, leaving a litre (a quarter of a gallon) of higher grade fuel costing around 9,000 rupiah (one dollar), up from the current price of 4,500 rupiah.

Warteg Tax

Warung Tegal (Warteg) originated from the words Warung i.e a small and simple place that sells cheap foods/drinks, and Tegal i.e name of a  town in Central Java.

In Jakarta and vicinity, Warteg is very popularly known as small and simple places that sell cheap foods/drinks on the sides of streets, where people of low-to-medium level income eat and drink.

But next year, the prices of food and drinks in Warteg would not be as cheap as they used to be, because starting 1 January, the Provincial government of Jakarta plans to collect Tax of 10% on every food and drinks sold there.

According to an officer of the Jakarta Tax Service Agency, there are now are now around 2,000 Warteg in Jakarta, but based on the Regional Tax Law No. 28/2009, only those who earn an income of Rp 60 Million a year or Rp 5 Million a month will be taxed. Right now the agency is still studying how many Warteg will be taxed, but they expect to collect Rp 50 Billion from Warteg.

This plan has been protested by many people including members of parliament of Jakarta who demanded that the minimum taxable income should be higher and starting date of collection should be postponed. .

In reaction to the protests, the Governor of Jakarta Fauzi Bowo said that the the Warteg Tax plan is still not fixed.

I hope that the Warteg Tax plan would be reviewed very carefully especially because consumers of Warteg are people of low-to-medium level income. 

Sources :
-  Warung Tegal Kena Pajak 10% (Pajak.com)
-  Warung Kecil Jangan Dibebani Pajak (Kompas)
-  Fauzi Bowo : Pajak Warteg Baru Wacana (VIVAnews)

Photo:  Courtesy of Antara

Invisible Gayus

Gayus Tambunan, a Defendant in the Tax Mafia case at the District Court of South Jakarta, finally admitted today that he was the man wearing wig and eyeglass watching an international tennis tournament in Bali. 

Gayus made the confession to reporters after the court trial session. He said that he went to Bali on 4 November stayed at the Westin Hotel and watched international tennis tournament on 5th and 6th. The Police took him back to detention on 7 November.

During the trial, Gayus has tearfully told the judge that we was very stressed detained at the headquarters of the Police Mobile Brigade since last July, therefore has has been asking for leaves like the other detainees.

According to reports, since he was detained Gayus has left 68 times. That was possible because he bribed the warden with 368 Million Rupiah. Besides, he has also paid One and a Half Million Rupiah per Week. Because of this, the Police have arrested nine officers responsible for his detention.
 
The above clearly shows that our country's detention and prison system is very bad whereby detainees who have lots of money can do things they want to do.

Due to which fact, I hope that the government and the Parliament would set up an independent body to investigate this case thoroughly, including who arrange Gayus' trip to Bali, what did he do and who did he met there.This must be done considering that Gayus was indicted for his involvement in the Tax Mafia cases where he has helped certain businessmen in Tax Crime.

For the purpose of this investigation, it would be best if Gayus is not given access to his money and/or meet people, thus should be isolated.

Sources :
- Bali Mystery Man Was Me' Says Gayus (The Jakarta Globe)
- Warden says Gayus had 68 times since July (The Jakarta Post)

Image:  Courtesy of Flickr

Gayus the Taxman

Gayus Tambunan, the Taxman (picture: Left) has been detained by the Police for alleged Corruption and Bribery charges now being tried at the District Court of South Jakarta.

Gayus has been detained by the National Police at the headquarters of the Police' Mobile Brigade, but the news media reported recently that a man who looks like Gayus (picture: Right) appeared at an International Tennis Tournament in the island of Bali.

Due to this report, the Police has investigated and arrested nine Police officers responsible for Gayus' detention at the headquarters of the Police's Mobile Brigate in Jakarta.

Photo:  Courtesy of Kompas.

Lazy Representatives

Every five years the Indonesian people elected some men and women as their representatives at the national and regional houses of representatives to supervise the management of the country.
In order to enable those representatives work well and diligently, the state provide them with very good salary, luxurious housing, car and other privileges.

However, many of those representatives do not seems to be satisfied with all those benefits and privileges that they tend to be lazy in attending meetings of the house of representatives.

According to the announcement of Secretariat General of the House of Representatives, members attending the meetings during 3 periods has been declining : at the first period (1 Oct.'09-4 Dec.'09) 92.57%, at the second period (4 Jan.'10-5 Mar '10) 84.32%, and at the third period (5 Apr'10-18Jun'10) only 71.59%.

The above announcement has made many representatives annoyed and angry, this is obvious because they felt terribly ashamed at their own behaviour.

Considering that those representatives are paid by the state using Tax Money collected from the people, I hope that an investigation would be carried out on those lazy representatives, and action would be taken on those who are proven to be lazy.


Related articles :
-  Less than 300 of 560 Legislators attend House Plenary Session (The Jakarta Post)
-  Lack of quorum, House plenary session temporarily delayed (The Jakarta Post)
-  Anggota DPR tetap Bandel dan Bolos (Kompas)
-  Kesekjenan DPR diminta klarifikasi data (Kompas)

Heavier Punishment for Tax Inspector

In Indonesia, men and women working with the Directorate General of Taxation are given a lot much higher salary compared to other civil servants, so that they can do their job properly and responsibly in collecting Tax badly needed for the management and development of the country.

Due to this fact, it is obvious that Tax Inspectors who are not honest in doing their jobs should face heavier legal consequences.

Please find below a related article that I quoted from The Jakarta Globe.

Prosecutors Seek Lengthy Jail Time for Tax Inspector

Prosecutors are seeking a 12-year sentence for suspended tax official Edi Setiadi for his role in a Rp 81.43 billion ($8.9 million) tax evasion case involving a provincial government-owned bank in West Java between 2001 and 2002.

Edi, a former chief tax investigator at the West Java Tax Office in Bandung, is alleged to have manipulated the tax returns of lender PT Bank Jabar-Banten in exchange for Rp 2.55 billion in bribes, prosecutors told the Anti-Corruption Court in Jakarta on Monday.

The Corruption Eradication Commission (KPK) previously said the tax fraud amounted to Rp 44.3 billion, but have since revised that estimate based on witness testimony to Rp 81.43 billion.

“The defendant’s actions caused substantial losses to the state,” KPK prosecutor Hadianto told the court.

Prosecutors allege that in 2001, Bank Jabar was supposed to have paid Rp 129.2 billion in taxes, which Edi slashed to Rp 74 billion. In 2002, the lender owed the state Rp 51.8 billion, which Edi again reduced to Rp 25.57 billion, prosecutors say.

The KPK last week named four of Edi’s former subordinates suspects for conspiring in the felony. They include Roy Yuliandri, Dedy Suwardi, Muhammad Yazid and Dien Rajana Mulya.

Edi is alleged to have taken Rp 565 million from the Rp 2.55 billion kickback and given the rest to the four others.

The KPK has also named former Bank Jabar chief accountant Hery Achmad Buchori a suspect in the case.

Prosecutors are seeking a Rp 200 million fine from Edi and restitution amounting to the sum of money he allegedly took.

Former Bank Jabar director Umar Syarifudin has already been convicted in the case and sentenced to seven years in prison.

In a separate case, the KPK has given 10 members of the Jakarta City Council an ultimatum to hand over the bribe money they allegedly received from the city administration to suppress a follow-up inquiry into April’s Tanjung Priok riot.

“A week ago we sent the councilors summons to clarify the issue and hand over any money they may have received as illegal gratuities,” KPK spokesman Johan Budi said on Monday. “So far none of them has come forward.”

Council Deputy Speaker Triwisaksana previously alleged that administration officials had attempted to bribe the councilors to not follow through on findings from the inquiry that may have seen several city officials face criminal negligence charges for the deadly riot.

But Triwisaksana said he was not aware of any councilor having taken a bribe.

Several weeks after the riot, in which three people died, a fact-finding team from the City Council called for the North Jakarta mayor and public order agency chief to be held accountable for their roles.

However, the recommendations were not followed up on by either the council or the city administration.

Tax Report and Corrupt Taxmen

After a couple of weeks of procrastination, last Wednesday afternoon I finally submitted my Annual Tax Report with the Tax Office at Kebayoran, South Jakarta.

Unlike in the past, I was so reluctant to submit this year's annual report, because I was very disappointed with the news reports about corruption at the Directorate General of Tax revealed by former Chief of Detectives of Police Susno Duadji about the swindle of billions (or trillions) Rupiah of Tax payers money by Taxmen, including Gayus Tambunan who was freed by the Court because of supports from officers of the Police, District Attorney and the judges of the District Court of Tangerang.

However,  I refuse to support fellow citizens who tried to persuade people not pay tax, not only because it is a crime to do so, but also because Tax is a source of state income needed to finance development and for the welfare of the people and country.

If we are disappointed with the misuse of Tax money, we should protests to the relevant institutions i.e. the Directorate General of Tax, the Minister of Finance, the law enforcement agencies and the Court Judges who freed the corrupt Taxmen, also the Immigration Officer that let Gayus escaped to Singapore.
Although the Department of Justice, and the Attorney General Office have not investigate the acquittal of Gayus, however the Minister of Finance has dismissed 10 of Gayus' superior officers and the Chief of Police has dismissed two high ranking officers.

I was grateful that last Wednesday, 31 March, the Police have brought back Gayus, therefore I was enable to submit my Tax Report on time. 

Gayus, theTax Man

On 19 March 2010, former Chief of Detectives of the National Police Susno Duadji told the media about some middlemen involved in Tax violations.

One of them was Gayus Tambunan (30), officer of the Tax Dispute Tribunal of the Directorate of Tax, who in spite of his low official salary was known to have a bank deposit of Rp 25 Billion, luxurious house and cars.

Actually, the above case has been tried by the District Court in Tangerang, Banten, who acquitted Gayus. But Susno revealed that only Rp 400 million of was recovered, while the other Rp 24.5 Billion is still a mystery.

Earlier, Gayus told the Police that the Rp 24.5 Billion belongs to Andi Kosasih. a businessman, for property purchase. 

Last Wednesday, two days before the Police named Gayus a Supect, Gayus left Indonesia with his wife (a staff of Jakarta regional parliament) to Singapore, a country that has not extradition treaty with Indonesia.

This case has made many Tax payers very angry and protested by opening accounts in the social media Facebook that urged people not to pay tax to protest the foul play at the Tax office.

For details, please click here, here, here, here, here and here, 

Considering that Tax is a very important source of income for Indonesia, I hope that this case would be investigated openly and thoroughly, so that the people in general and taxpayers in particular would still have trust on the government. 
However, I hope that said investigation would not divert the law enforcement's consentration  from the mysterious Rp 6.7 Trillion bail out of Bank Century.   

Photo : Courtesy of VivaNews.

Tax Report Submission

The end of March is the deadline for submitting annual tax report with the local Tax Office, and many people including me, would usually wait until the last day to do it. Here are the details about it that I have quoted from The Jakarta Globe.

 A tax office employee stamping tax forms at a drop box in Jakarta. Taxpayers are required to file by  March 31. (Antara Photo)

Indonesia's Tax Deadline Looms

Indonesian taxpayers have until March 31 to fill out their annual tax declaration or SPT. Here are some tips:

You can download an SPT at the Directorate General of Taxes website, http://www.pajak.go.id, or pick it up at your local tax office.

There are three kinds of forms:

1.SPT PPh 1770: for taxpayers who have their own business.
2.SPT PPh 1770 S: for taxpayers who work as a company employee with an annual salary above Rp 60 million (about $6600).
3.SPT PPh 1770 SS: for taxpayers who work for individuals or informal businesses.

If you have any questions when filling out your form, you can seek help at the Tax Office where you are registered or at the tax stations or mobile tax facilities available in many office buildings and shopping malls.

The SPT must be printed on size F4 paper (8.5 X 13 inches). The form must not be folded or wrinkled. It must be signed or it will be considered invalid. You can fill out the form by hand or on a computer.

You can file your taxes directly to the local Tax Office or in numerous other places such as Tax Corners, Mobile Tax facilities, Drop Boxes and post offices. You will receive a receipt which you must keep.

Taxpayers who miss the deadline and fail to file for an extension face a fine of Rp 100,000 (about $11).

Tax Incentives for Renewable Energy

Ever since its oil wells started to dry several years ago, Indonesia has been developing renewable energy projects such as Geothermal and Solar Power.

In order to expedite the development process, on 29 January the government has offered Tax Incentives for such projects.

Please find below an article that I found in Reuter for reference.

Indonesia offers tax incentives for renewable energy

Fri Feb 12, 2010 8:28am GMT

JAKARTA, Feb 12 (Reuters) - Indonesia is offering tax incentives to develop renewable energy projects, including geothermal energy, to cut dependency on fossil fuels, a decree published on the finance ministry's web site (www.depkeu.go.id/ind/) showed.
Indonesia has said previously that its wants to use more renewables and is targeting by 2025 an energy use mix of 30 percent from gas, 20 percent from oil-based fuels, 30 percent from coal, and the rest from renewables such as geothermal and solar power.

According to the decree, signed Jan. 29 by Finance Minister Sri Mulyani Indrawati, the government will reduce net tax by 5 percent per year on total investment for 6 years.

The government will also allow faster asset amortization and impose a lower tax rate on dividend payments for non-resident investors, the decree said.

The government will also provide exemption from value-added tax and import duty for equipment and machinery used in renewable energy projects.

An exemption on value-added tax on equipment used for exploration of oil and other energy resources, including geothermal, has also been extended until December.

Indonesia, with hundreds of active and extinct volcanoes, has the potential to produce an estimated 27,000 MW of electricity from geothermal sources.

However, that potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.
Chevron, Local energy firm Medco Energi Internasional and state oil firm Pertamina currently have geothermal investments in Indonesia.

Indonesia has also been offering new exploration rights and financial incentives for oil and gas investors in a bid to stem a steady decline in production that has increased the need for imports.

However, oil industry players have said that the incentives are not sufficient.

Indonesia has turned into a net importer of crude oil in recent years as production has slumped after a failure to tap new fields fast enough. Its crude oil production has dropped from about 1.5 million barrels per day (bpd) in the 1990s to about 815,000 bpd currently.
(Reporting by Muklis Ali; Editing by Ed Davies)

Top 100 Tax Debtors

Last Thursday, the Directorate General of Taxation has surprised us when they announced that there are 100 companies that have a tax debt totaling Rp 17.5 Trillion, i.e one third of tax debt of Rp 52 Trillion.
They include state owned enterprises like PT Pertamina, PT Garuda Indonesia Airlines,  PT Jamsostek and PT BNI. Please find below an article quoted from Kompas.

I hope that those debts would be able to be collected very soon,  considering that they are badly needed to finance the development in this country.

100 Companies in Tax Arrears of Rp. 17.5 Trillion

Jumat, 29 Januari 2010 | 12:58 WIB

JAKARTA, KOMPAS.com — Unbelievable. The Directorate General of Taxation records that within the last five years, since before December 31, 2009, there are 100 companies with tax in arrears that sum up to Rp. 17.5 trillion, or 33.7 percent of the total tax in arrears, which is Rp. 52 trillion.

Thursday, the Directorate General of Taxation submitted the list of tax debtors to the Commission XI of the House, which is in charge of finance and banking. "Those are all the tax in arrears for the last five years," said the chief deputy of Commission XI of the House, Melchias Marcus Mekeng.

A number of government enterprises are included in the top 100 major debtors list, among which, PT Pertamina, PT Garuda Indonesia, PT Jamsostek, and PT Bank BNI Tbk.

Unfortunately, Melchias didn't breakdown the debt figures for each of those companies. The Director General of Taxation, Mochad Tjiptardo, also didn't reveal the numbers of the companies' debts. But clearly, "They all must pay," commented Tjiptardjo.

The Directorate General of Taxation is doing various endeavors to collect the debts. They would even go as far as confiscating assets, including what's deposited in banks or from tax debtors that don't show a good will to pay their tax in arrears. This can be done by blocking bank accounts, interception, or even gijzeling (a form of confiscation).

Mass denials

However, a number of companies in the list deny of having tax debts in arrears. "We're ready for data confirmation because we have all our tax payment proofs," said Gandhi Sulistyanto, director of Sinar Mas Group, the mother-company of PT Pabrik Kertas Tjiwi Kimia and PT Pindo Deli Pulp and Papermills, which is included in the list.

Similar denials come from the managing director of PT Jamsostek Hotbonar Sinaga. He even stated that his company has over-paid their tax and has restitution rights from the retirement fund tax deposit, which has been deducted by the bank, with an amount of Rp. 1.4 billion.

Finance director of PT Bank Bukopin Tri Joko Prihanto suspects that his company's tax debt in arrears come from the transactions of its syariah units. However, "the issue is still in dispute, because the government hasn't determined whether Islamic syariah units are subject to tax or not."

Said Didu, secretary to the state minister of state enterprises also admits that part of the government's tax debts in arrears are still in dispute. But, "We will double check and facilitate a meeting between state-owned enterprises and the Directorate General of Taxation." (Kontan/Martina P., Lamgiat S., Roy Franedya, Ade Jun P./C17-09)

Taxable Sex

The United States Tax Court has decided that payments for Prostitutes and Pornographic materials are subject to tax. Please find below an article in Legal Blog Watch/Robert J. Ambrogi regarding this matter.

Tax Court Writes Off Lawyer's Deduction for Prostitutes

A veteran New York tax lawyer has lost his legal battle to claim tax deductions for more than $100,000 he spent on prostitutes and pornography. But, hey, you can't blame a guy for trying.

William G. Halby, a tax lawyer first admitted to practice in New York in 1956, claimed the deductions as medical expenses. His visits to prostitutes and his purchases of books and magazines constituted sex therapy, he contended. Over two years, he claimed deductions for $108,086 spent on prostitutes and $7,373 on books, magazines, videos and pornographic materials.

But in a decision issued this week, the U.S. Tax Court ruled that Halby's sex therapy was not an allowable deduction.

Petitioner’s payments to various prostitutes were personal expenses not prescribed by a doctor and not intended to treat a medical condition. Petitioner is not entitled to deductions for these amounts.

Petitioner is likewise not entitled to deductions for amounts paid for books and magazines on sex therapy and pornography. The purchases were not for the treatment of a medical condition but were instead personal items.

At least it can be said that Halby was meticulous in claiming these deductions. The Tax Court said that he kept track of his visits to prostitutes in a journal. "The journal included the date, the name of the 'service provider,' and the amount." He did not, however, ask the "service providers" for receipts.

Not only did Halby lose the deduction and have to make up some $21,000 in tax deficiencies, but he was also ordered to pay a penalty of $4,298 for claiming deductions without any reasonable basis in the tax law. As an attorney who specialized in tax law for more than 40 years, the court said, Halby "should have known that his visits to prostitutes in New York were illegal and that section 213 [of the tax code], the regulations thereunder, and caselaw do not support his claimed deductions."

Halby's Martindale-Hubbell profile shows him as being of counsel to a law firm in Larchmont, N.Y., but the firm's Web site does not list him anywhere. Halby had already lost a state tax case involving these same deductions, with the N.Y. Division of Tax Appeals concluding that "permitting the deductions would be counter to public policy."

An Afternoon at the Tax Office

Today, 31 March 2009 is the last day for submitting annual tax report (SPT) with the Tax Office. For this reason, I have spent the last few days preparing my personal tax report & submitted it this afternoon with the Tax Office located close to my domicile.

I arrived at 3.30 pm & found that the Tax Office has changed their way of receiving the reports. In the past I usually placed my report on a writing paper envelope and hand it over to the officer in charge, who would ask me to wait until my name is called. After that an officer would check my documents, if complete he/she will give me a receipt. The time for process depends on the number of people submitting the report. Usually during the last days, it can take at least one hour.
But today it is different, when I got there an officer asked me to get a special envelope freely provided by the office and write on it my name, taxpayer number (NPWP) and my phone number. After that I was asked to take a queuing number. I got number 518, at that time it was the turn for number 470. After twenty minutes, my number was called and I was asked to meet a lady officer who took my envelope and gave me a receipt without opening the envelope. She said that if my report were not complete a tax officer would call me on the phone. She also explained that they have to change the way of receiving reports because this year there are so many reports compared to previous years. This is the consequence of our government’s policy to require working citizens to have taxpayer numbers. As a result, even office boys have to submit tax report now. At 4 pm, I left the Tax Office.

In conclusion, I felt that the new way of receiving Tax Report could be improved, i.e. instead of asking taxpayers to write on a special envelope freely provided by the Tax Office, it would be better if we just use our own envelope, so that we can directly queue for our turn, thus saving us time, and the Tax Office would be saving money by not providing the free envelope.

No more Fiscal in 2011

We often heard government officials complaining that there are very few people in Indonesia who wants to register themselves as Tax Payer.

According to the PR Director of the Directorate General of Tax Djoko Slamet, as reported by Kompas, currently there are only 10 mio. citizens who have Tax Payer Identification Number (NPWP), which is very low compared to the the total of 230 mio. population of Indonesia.
In order to attract more people to register as Tax Payer, starting 1 January 2009, the government will not charge owners of NPWP with Fiscal i.e. Fee for going outside Indonesia. On the contrary, those who do not own NPWP will be charged with Fiscal amounting to Rp 2,5 mio. which higher than the previous amount of Rp 1 mio. But, this will only go on until end of 2010, because starting 1 January 2011 the government will not charge Fiscal anymore. Citizens, with or without NPWP, will be free to travel abroad.

In spite of the fact that this is a Real Good News for us, however the plan to stop Fiscal Fee would mean that the government would loose certain revenue. I only hope that such loss would not be compensated by increasing other Tax. Let us keep our fingers crossed!