KPK Requests Revision on Mining Taxation

ANT, Jazmi Adlan Bohari
 
The Commission for Corruption Eradication (KPK) has requested that the Government, more particularly the Directorate General of Tax, revise the minor sector’s taxation system. This request arose after the KPK’s findings in its assessment of mining companies.
 
During a press conference at the KPK last Wednesday, the anti-graft agency identified seven problems in the coal and mineral taxation system. First, and fundamentally, Tax Identification Number (NPWP) data for the sector is not accurate. Of 3,826 mining companies, almost 25 percent or 724 companies had not obtained an NPWP including mining permit holders with a “clean and clear” status.
 
Second, the system’s supporting data is lacking, particularly for production data, due to the different statistical information of related institution. For instance, in 2012, on one item the Directorate General of Tax recorded USD 228 million, while the World Coal Association (WCA) recorded USD 443 million.
 
“Third, there are multi-interpretations of the application of the taxation rules, which is the main issue in tax disputes,” said Adnan Pandu Praja, KPK Deputy Chairman
 
The fourth problem is limited regulations to obtain external data for taxation purposes. Fifth, data on external tax request management is not yet optimal.
 
“A sixth problem is a lack of supervision on taxpayers. We only have 4000 tax inspectors, which is far behind other countries’ standards,” Mr. Praja continued.
 
Finally, the analysis functions for potential tax at the Directorate General of Tax is also not yet optimal.
 
“These circumstances cause issues such as inaccurate basic data on taxpayers, lack of external data, limited comparative data which leads to monitoring difficulties, lack of analysis and capacity functions with respect to taxpayers, and fraudulent conduct by taxpayers and tax officers,” explained Mr. Praja.
 
Based on these findings, Mr. Praja suggests that the Directorate General of Tax should increase both basic data and external data, increase inter-institutional mechanisms, and also perfect the implementation of regulatory and guidance functions as well as strengthen tax analysis and its supervisory function.
 
Fuad Rachmany, Director General of Tax, acknowledged the KPK study as basis to avoid further state losses and corruption as well as improving mining sector management.
 
“We indeed require cooperation from the KPK to monitor action plans that we have made pursuant to the results of the KPK study,” said Mr. Rachmany .
 
(hot/kc)
ANT, Jazmi Adlan Bohari
 
The Commission for Corruption Eradication (KPK) has requested that the Government, more particularly the Directorate General of Tax, revise the minor sector’s taxation system. This request arose after the KPK’s findings in its assessment of mining companies.
 
During a press conference at the KPK last Wednesday, the anti-graft agency identified seven problems in the coal and mineral taxation system. First, and fundamentally, Tax Identification Number (NPWP) data for the sector is not accurate. Of 3,826 mining companies, almost 25 percent or 724 companies had not obtained an NPWP including mining permit holders with a “clean and clear” status.
 
Second, the system’s supporting data is lacking, particularly for production data, due to the different statistical information of related institution. For instance, in 2012, on one item the Directorate General of Tax recorded USD 228 million, while the World Coal Association (WCA) recorded USD 443 million.
 
“Third, there are multi-interpretations of the application of the taxation rules, which is the main issue in tax disputes,” said Adnan Pandu Praja, KPK Deputy Chairman
 
The fourth problem is limited regulations to obtain external data for taxation purposes. Fifth, data on external tax request management is not yet optimal.
 
“A sixth problem is a lack of supervision on taxpayers. We only have 4000 tax inspectors, which is far behind other countries’ standards,” Mr. Praja continued.
 
Finally, the analysis functions for potential tax at the Directorate General of Tax is also not yet optimal.
 
“These circumstances cause issues such as inaccurate basic data on taxpayers, lack of external data, limited comparative data which leads to monitoring difficulties, lack of analysis and capacity functions with respect to taxpayers, and fraudulent conduct by taxpayers and tax officers,” explained Mr. Praja.
 
Based on these findings, Mr. Praja suggests that the Directorate General of Tax should increase both basic data and external data, increase inter-institutional mechanisms, and also perfect the implementation of regulatory and guidance functions as well as strengthen tax analysis and its supervisory function.
 
Fuad Rachmany, Director General of Tax, acknowledged the KPK study as basis to avoid further state losses and corruption as well as improving mining sector management.
 
“We indeed require cooperation from the KPK to monitor action plans that we have made pursuant to the results of the KPK study,” said Mr. Rachmany .
 
(hot/kc)
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