Page 9 - Working Paper (Asymmetric Information & Its Impact On Tax Compliance Cost In Indonesia)

DDTC Working Paper 0113 DDTC Working Paper 0113
9

avoidance, informal economy and corruption in a iv. Development of an information system for the
17
country. Additionally high compliance costs also public to access information. Tax authorities
influences the investment climate of a country. should have an active role in providing services
to the taxpayers without any preference
Considering the interaction models as above another. This could potentially increase
described above and its impact on compliance administrative cost but on the same time also
costs, the following policy options are relevant to decrease compliance cost in a certain degree.
be considered in order to anticipate its negative
v. Development of an internal information system
effects on the economy:
for the tax authorities. This could ensure
i. Regulations should be simple and clear consistency in the perception of certain cases
for each party involved in a tax system. and/or interpretation of regulations among tax
Regulations as a manifestation of contract authorities.
between the Government (in this case the tax vi. Conduct tax training for the press to develop
authorities) and the people (in this case the capacity in tax matters. This is important
taxpayer) should be drafted where parties well because the press is at the frontline for
represented, the contents are feasible, and informing the public in tax matters. Besides the
rights and obligations are divided equally and above, the press is also a filter for misleading
rationally between the parties concerned. information from public figures that do not
ii. Information on decisions made by tax court have a track record in taxation.
should be publicly accessible, so that the public vii. Create certainty in the Law (add punishment)
could control its consistency with the Law. regarding uncertainties that is created by
iii. The role of tax consultants should be regulated agents in the interaction models.
clearly. This role should not be discriminative viii. Evaluation of certification requirements for
in nature, but rather based on good corporate tax consultants to ensure clarity and balance
governance principles. Besides the above, tax in the certification system for tax consultants.
consultant should have wider role in resolving This also includes evaluation of the education
asymmetric information by for example: an curriculum and the authorized institution
obligation to provide services for free for which conducts such certifications.
certain small and medium enterprises.
ix. Development of a good system of advance tax
rulings to break complexity and uncertainty to
17 The World Bank/IFC dan PWC. 2011. Paying Taxes 2012: The Global lead more compliant taxpayer behavior.
Picture, p. 14.

Menara Satu Sentra Kelapa Gading
6 Floor Unit #0601 - #0602 - #0606
th
Jl. Bulevar Kelapa Gading LA3 No. 1
Summarecon, Kelapa Gading
Jakarta Utara 14240 Indonesia
Phone: +62 21 2938 5758
Fax: +62 21 2938 5759
www.ddtc.co.id