Page 9 - Indonesia Taxation Quarterly Report (Q3-2019)

Executive Summary

to prepare an economic analysis and Taxation Supervisory Committee, the
impact assessment of the proposals provisions of which are regulated by a
since some parties assert that the Minister of Finance Regulation.
efforts to reshape corporate tax rules are
moving ahead without wholly assessing In many countries, the establishment of
the potential consequences of proposed a tax ombudsman usually begins with
schemes. tax reforms. This is inseparable from
the general comprehension that ideal
There is also a discussion about tax reforms must involve structural and
development of tax reform since OECD institutional reforms from stakeholders
indicates that the pace of tax reform in the tax sector. Accordingly, taxpayers
has slowed in most major economies. should not only be viewed as a ‘money
OECD urged that most countries machine’ for the government. Tax reforms
only conduct less significant reform should not only be interpreted as an effort
and often undertaken in a piecemeal to increase tax revenue. Furthermore,
fashion. On the other hand, there was tax reform should provide a balanced
significant progress on improving tax fiscal contract restoration framework
transparency through CBCR as part of between the state (government) and
BEPS Action 13. CBCR itself provides society (taxpayers). As such, taxpayers
an unprecedented level of transparency must be given access to the institutions
to tax administrations of large MNEs representing their voices to review the
worldwide. extent to which the power to tax has
been properly administered.
Strengthening Tax The tax ombudsman is, in essence, a
Ombudsman Role form of representation for taxpayers to
guarantee their rights. In this case, the
In the context of tax reform, providing Taxation Supervisory Committee can
the right balance between taxpayers’ act as a bridge between the taxpayers
rights and tax authority power would and the tax authority, among others,
set up the core of effective good by ensuring a participatory policy
governance in tax administration. It will formulation process.
ease the shift of taxpayers’ paradigm
from enforced to voluntary compliance. The taxpayers’ representation and the
Accordingly, a fortified tax ombudsman independent nature of the Taxation
will upgrade the taxpayer’s perception Supervisory Committee are evident in
toward the government. In addition, they the membership structure consisting of
will become more aware that their rights the Secretary General and the Inspector
are getting more attention and priority General of the Ministry of Finance as
from the authority. permanent members, plus 5 (five) other
members, at least 4 (four) of whom are
Ombudsman means ‘representative’ non-civil servants. However, the most
and the first modern ombudsman was fundamental thing to underline is: the
first established in 1809 in Sweden Taxation Supervisory Committee is
(justitieombudsman). As the name ought to be an institution representing
implies, ‘ombudsman’ is concerned taxpayers, not the Ministry of Finance.
with protecting citizens from violations
of rights by the state apparatus, abuse In addition, the Taxation Supervisory
of power, wrongdoing, neglect and Committee may act as a mediator in
maladministration, unfair decisions, and alternative dispute resolution (ADR,)
delays that result in uncertainty. specifically, the mediation mechanism.
The Taxation Supervisory Committee’s
In Indonesia, the tax ombudsman role as the facilitator or mediator is far
has been present in the form of the more appropriate due to the institution’s
Taxation Supervisory Committee independence. This function must
(Komite Pengawas Perpajakan) as the undoubtedly be supported by a legal
implementation of Article 36C of Law basis of ADR and revitalization of the
Number 6 of 1983 concerning General Taxation Supervisory Committee.
Tax Provisions and Procedures as last
amended by Law Number 28 of 2007 Furthermore, the Taxation Supervisory
(KUP Law). The article states that the Committee’s role in ensuring the proper
Minister of Finance has established the provision of services (in terms of tax

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