From The Jakarta Post
http://www.thejakartapost.com/detailheadlines.asp?fileid=20060228.@03&irec=4 Lawmakers put tax reform on the back burner
Rendi Akhmad Witular, The Jakarta Post
Lawmakers and tax officials are in no hurry to push through the much-anticipated reform of the country's tax regime, even as time runs out for its completion this year.
While the pornography bill is the hot topic in the legislature, House Commission XI on financial affairs has yet to begin deliberation of proposed amendments to three tax laws aimed at helping lure badly needed investment into the country.
"There is no need to hurry. We're still seeking input from various parties before we decide to discuss the content of the laws. I expect lawmakers could start the deliberation after April," said commission member Max Moein.
Last September, the government submitted draft revisions for Law No. 16/2000 on general taxation arrangements and procedures, Law No. 17/2000 on income tax and Law No. 18/2000 on value-added tax (VAT) on goods and services and luxury sales tax. The new laws were supposed to take effect in early 2007.
But with some officials estimating the deliberation process will take at least nine months, it is unlikely the revised bills could be passed this year.
Also likely to stall their passage is the fierce opposition of the business community to aspects of the revisions, especially in the greater power proposed for the tax office in Law No. 16/2000.
Max was even more pessimistic about the schedule, saying past experience showed bills on economic affairs took at least two years to be passed due to "complicated technicalities".
"Tax officials have also said that the deliberation could be delayed into 2007, with the implementation to start in 2008," said the legislator of the Indonesian Democratic Party of Struggle.
"I think the existing tax laws are already sufficient for exploring more taxes."
Meanwhile, Robert Pakpahan, director for tax revenue potential at the Ministry of Finance's directorate general of tax, said the directorate had yet to be invited by legislators to discuss the bill.
"We don't know why the lawmakers are not prioritizing the amendments. On no account do we want to maintain a status quo. Anyway, a delay in the deliberation will not be a big deal since we can still use the existing laws," he said.
Another official, speaking on the condition of anonymity, alleged there were members of the tax office resistant to change.
"There are several officials who want to maintain the status quo at the tax directorate by trying to delay the deliberation. They fear that any debate will eventually accommodate the requests of the business community," said the senior tax official.