For decades, the community considered that violations in the field of taxation were only sufficiently resolved by administrative measures such as appeals, clarification, or examination. Some are even waiting for the Director General of Taxes to issue a tax assessment letter. If there is a tax dispute, without doubt the taxpayer filed an objection and even an appeal to the tax court. We seem ignorant of the fact that violations committed by taxpayers can be categorized as criminal acts if they meet criminal elements as regulated in General Provisions and Tax Procedures (KUP).

Many modes of taxpayers commit tax crime, including issuing and / or using tax invoices that are not based on actual transactions (TBTS), deducting / collecting taxes but do not deposit them to the state treasury, and submitting tax returns (SPT) and / or information the contents of which are incorrect or incomplete. In addition, taxpayers can also commit other criminal acts such as money laundering (TPPU) which may accompany tax penalties as predicate crime.

Recently the Minister of Finance inaugurated Suryo Utomo as Director General of Taxes to replace Robert Pakpahan. As from the beginning of November 2019, the DGT was officially appointed by the new Director General. The business community hopes that the Director General of Taxes can create better taxation policies and performance. On the other hand, the facts show that tax revenue achievements until the end of October 2019 have not been encouraging. It is predicted that this year’s tax revenue shortfall will reach around Rp140 trillion from the target of the State Budget of Rp1,577.56 trillion, or only reached around Rp1,315.91 trillion (91 percent). Enforcement of tax law is also on his shoulders as the highest head of the DGT.

Administrative vs. Criminal

The achievement of tax revenue should be done not only with a persuasive administrative approach. If there are criminal indications committed by taxpayers, the DGT may not hesitate to process them through the preliminary proof examination and if necessary go through an investigation. Of course there is no intention to frighten, but all parties also need to know that law enforcement is part of the business process at DGT. The mouth is giving deterrent effects and increasing taxpayers. If the taxpayer complies, God willing, tax revenue will increase.

In almost all countries that collect taxes, tax compliance is always a problem. This is due to the polarization between “compulsory obligations” for every citizen to pay taxes and human nature which is not easy to give up property or money that has been his right. The two poles create a space that allows citizens to disobey tax obligations. In fact, some people even take actions that are categorized as tax crimes either due to negligence or deliberately.

During the period of 2014 to 2018 DGT has completed 425 case documents. This amount is relatively small when compared to the potential for taxpayers to commit criminal acts. However, due to the limited number of investigators and disclosure of cases that require a significant amount of time, coupled with the importance of resolving underpayments of taxpayers through administrative actions, the completion of P-21 as above is good enough.

In the region of West Sumatra and Jambi, for example, a sentence of 3 years in prison and a fine of more than Rp. 6 billion, a six-month prison sentence was imposed by the Jambi District Court to the president director of PT Jambi Jaya Makmur (engaged in the sale and purchase of diesel fuel). Likewise in other regions, many tax criminal cases have been decided by the court and the perpetrators are jailed and fined.

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Criminal punishment is not something sudden. There is a long process that starts from checking the initial evidence. At this stage, the preliminary evidence examiner seeks to find at least two pieces of evidence that corroborate the allegation that a tax crime has taken place. However, taxpayers are given the opportunity to complete the principal payment plus a fine of 150% as stipulated in Article 8 paragraph (3) of the KUP Law so that the process of checking the preliminary evidence is stopped. If the payment is not completed, the investigator will upgrade the status of the preliminary evidence examination to the investigation.

In the investigation stage, the investigator will take pro justicia actions by calling suspects, witnesses, and experts to be examined. In the final stage, the investigator prepares a case file and delegates it to the prosecutor’s office. This effort can be stopped if the taxpayer completes the payment of state losses of the principal plus a fourfold fine of Article 44 paragraph (2) of the KUP Law). If not carried out, the investigation will continue to be prosecution and trial in court. Let the judge decide what punishment is appropriate for the tax criminal.

If asked to the conscience about the actions of the investigation that ended in prison sentences and fines, certainly no one wants to take away the independence of others. We highly respect the right of people to enjoy freedom including working to support themselves and their families. But, cheating some people to take advantage by committing crimes in the tax sector certainly harms state revenue which also harms the right of other citizens to obtain welfare. Kezalilman must be terminated by giving a criminal sentence.

Thus, the purpose of tax criminal action as a last resort to improve the behavior of taxpayers (ultimum remidium) is to make taxpayers more obedient to taxation rules and to have a deterrent effect to tax law violators. Not only against taxpayers as perpetrators, but also representatives, power of attorney, employees of taxpayers, and other parties who order to do, participate in committing, who advocate, or who help commit criminal acts in the taxation field.

However, DGT’s efforts to investigate criminal acts in the taxation field should not merely meet the quantity targets. In order to create a deterrent effect and increase taxpayer compliance, efforts should be made to encourage the effectiveness of tax investigations. First, add tax investigation personnel. The number of active tax investigators at the DGT currently amounts to 645 people out of a total of 1,477 employees who have attended education and were appointed. That means there are still many educated workers who have not been fully used in tax law enforcement efforts. Like arrows, the investigators are just waiting for when he will be released from his bow to stick to the target.

Second, intensifying the investigation of predicate crime in the form of money laundering (TPPU) in the form of criminal acts in the taxation field. Cooperation with OJK and PPATK in law enforcement and information exchange needs to be improved. Third, intensify the investigation of tax crime cases against TBTS tax invoice users because it usually involves many parties. Fourth, improve coordination with the Police Civil Servant Investigation Corps (PPNS) and the Prosecution in the investigation activities. Fifth, increase the capacity of prosecutors through the implementation of taxation training and training to assist prosecutors in solving tax crime cases. Sixth, support of digital forensics in the investigation process, especially in the collection and processing of digital evidence.

In the field, prosecution of tax criminal cases is not without obstacles. Resistance taxpayers can be done in various forms and ways ranging from questioning matters that are administrative to report tax investigators to the police. The main target is clear: fail to investigate. Whereas Article 36A of the Law on General Provisions and Tax Procedures (KUP) states that tax officials cannot be prosecuted, both civil and criminal, if in carrying out their duties based on good faith and in accordance with the provisions of tax legislation.

As a large country, we need development costs that are not small. In 2019 the government is targeting state expenditure of Rp2,461.1 trillion. As stated at the beginning of the article, tax is expected to be able to contribute revenue of Rp1,577.6 trillion. While in 2020, the government is targeting state expenditure of IDR 2,540.4 trillion, of which Rp1,861.8 trillion is supported by tax revenue.

Tax crimes not only harm state revenue, but also those who are entitled to the welfare and service of the state. So, every tax crime offender should get a punishment in order to provide a deterrent effect for anyone, both the perpetrators and those who participate in committing the crime. Compliance with taxpayers in carrying out their tax obligations is expected to support the achievement of state revenue.

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