XBRL System Recommended to Track down Tax Evaders

 
Nadia Maharani, Fitri N. Heriani
 
To date, Indonesia’s tax income has yet to reach a satisfactory level while the incomes targeted by the taxation sector remain out of reach. Aside from a public lack of awareness regarding tax benefits, there is also the problem of intentional tax evasion by certain parties, including publicly traded companies operating on the Indonesian Stock Exchange (IDX).
 
In an effort to minimize tax offenses, the Indonesian Accountants Association (IAI) has recommended the implementation of the Extensible Business Reporting Language (XBRL) system in the financial reporting of publicly traded companies. The IAI firmly believes that XBRL will be able to minimize tax evasion engaged in by publicly traded companies, since XBRL will allow the Director General on Tax (Director General) to track offenders easily.
 
XBRL is a global standard that is used in the exchange of business information. It improves preparation and analysis processes, as well as accuracy for all parties providing and utilizing business information. XBRL is also known to enhance efficiency and speed, as well as automating data management. All of these attributes are crucial to support data analysis and information results, which will in turn be used to make business decisions.
 
All of the above key points were summarized by Rosalita Sinaga, a member of IAI’s National Management Board at the Indonesia International XBRL Conference two days ago. Mrs. Sinaga further declared that XBRL has become the primary instrument in the reporting processes of various business sectors, including banking, insurance, securities regulators, data providers, and taxation.
 
Mrs. Sinaga asserts that if the IDX encourages the use of XBRL, then it will greatly improve the ability of the Directorate General of Tax (Directorate General) and the Ministry of Finance (Ministry) to track down tax evaders. Moreover, it will also allow the public to easily access data regarding publicly listed companies (PLCs). Mrs. Sinaga is also confident that the system is capable of tracking down companies who are involved in producing double financial statements.
 
“If the Director General of Tax implements XBRL, then those who use or have been using double financial statements will easily be exposed,” Mrs. Sinaga claimed.
 
In this statement, Mrs. Sinaga confirms the widely held suspicion that certain companies produce double financial statements. IDX’s consistency in developing and applying XBRL would make it easy to reveal such practices to the general public. The data provided through the implementation of XBRL may also be compared and contrasted with the reports that are submitted by companies to the Director General.
 
“Therefore, any differences can be spotted directly. Our present problems are caused by manual data inputs, which make tax officials reluctant to engage in such a details comparison process,” explained Mrs. Sinaga.
 
In order to make the XBRL system operate effectively, Mrs. Sinaga expressed the hope that the Financial Services Authority (OJK) will oblige all publicly traded companies and PLCs to use it, with free XBRL software being offered to any party willing to use the system as an incentive.
 
Commenting on the issue, Samsul Hidayat, the Director of Company Assessment at the IDX further elaborated that XBRL was an integrated concept in quantitative financial-data reporting. The system also simplifies the analysis process for both regulators and analysts, he claimed.
 
Futhermore, Mr. Hidayat emphasized that XBRL standardized report submissions for all businesses by obliging companies to submit their reports in both a native language and in English.
 
“This is because English is considered to be the universal language and is understood by many analysts, including those who do not understand Indonesian,” concluded Mr. Hidayat.
 
(sp)
 
Nadia Maharani, Fitri N. Heriani
 
To date, Indonesia’s tax income has yet to reach a satisfactory level while the incomes targeted by the taxation sector remain out of reach. Aside from a public lack of awareness regarding tax benefits, there is also the problem of intentional tax evasion by certain parties, including publicly traded companies operating on the Indonesian Stock Exchange (IDX).
 
In an effort to minimize tax offenses, the Indonesian Accountants Association (IAI) has recommended the implementation of the Extensible Business Reporting Language (XBRL) system in the financial reporting of publicly traded companies. The IAI firmly believes that XBRL will be able to minimize tax evasion engaged in by publicly traded companies, since XBRL will allow the Director General on Tax (Director General) to track offenders easily.
 
XBRL is a global standard that is used in the exchange of business information. It improves preparation and analysis processes, as well as accuracy for all parties providing and utilizing business information. XBRL is also known to enhance efficiency and speed, as well as automating data management. All of these attributes are crucial to support data analysis and information results, which will in turn be used to make business decisions.
 
All of the above key points were summarized by Rosalita Sinaga, a member of IAI’s National Management Board at the Indonesia International XBRL Conference two days ago. Mrs. Sinaga further declared that XBRL has become the primary instrument in the reporting processes of various business sectors, including banking, insurance, securities regulators, data providers, and taxation.
 
Mrs. Sinaga asserts that if the IDX encourages the use of XBRL, then it will greatly improve the ability of the Directorate General of Tax (Directorate General) and the Ministry of Finance (Ministry) to track down tax evaders. Moreover, it will also allow the public to easily access data regarding publicly listed companies (PLCs). Mrs. Sinaga is also confident that the system is capable of tracking down companies who are involved in producing double financial statements.
 
“If the Director General of Tax implements XBRL, then those who use or have been using double financial statements will easily be exposed,” Mrs. Sinaga claimed.
 
In this statement, Mrs. Sinaga confirms the widely held suspicion that certain companies produce double financial statements. IDX’s consistency in developing and applying XBRL would make it easy to reveal such practices to the general public. The data provided through the implementation of XBRL may also be compared and contrasted with the reports that are submitted by companies to the Director General.
 
“Therefore, any differences can be spotted directly. Our present problems are caused by manual data inputs, which make tax officials reluctant to engage in such a details comparison process,” explained Mrs. Sinaga.
 
In order to make the XBRL system operate effectively, Mrs. Sinaga expressed the hope that the Financial Services Authority (OJK) will oblige all publicly traded companies and PLCs to use it, with free XBRL software being offered to any party willing to use the system as an incentive.
 
Commenting on the issue, Samsul Hidayat, the Director of Company Assessment at the IDX further elaborated that XBRL was an integrated concept in quantitative financial-data reporting. The system also simplifies the analysis process for both regulators and analysts, he claimed.
 
Futhermore, Mr. Hidayat emphasized that XBRL standardized report submissions for all businesses by obliging companies to submit their reports in both a native language and in English.
 
“This is because English is considered to be the universal language and is understood by many analysts, including those who do not understand Indonesian,” concluded Mr. Hidayat.
 
(sp)
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