JAKARTA. The revision of Law on Taxation is back to square one, since the draft of the revision was withdrawn from DPR (the House of the Representatives or Parliament) so that it is not on the list of legislation priority discussed by the DPR.
Initially, many people hoped that the success of the first phase of the tax amnesty will be the entryway for tax reform, which includes the review on the Taxataion’s General Provisions and System (UU KUP). The law (UU KUP) is a law umbrella of taxation system of Indonesia.
However, Minister of Finance Sri Mulyani decided to review the revision draft of the UU KUP, which had been submitted to DPR, on the grounds that the crucial points in the draft will be reviewed.
“I think, we need to review it. We will look at the weakness and strengths of the law in an objective manner,” said Sri Mulyani, Monday (28/11). Sri added that the Ministry will also review the design for the revision.
One of the points, which will be reviewed, is the plan to form National Board of Tax Revenues (BPP). “While the institution (BPP) has not yet been formed, we will review the performance (of tax authority) during the recent three years,” Sri added.
As information, BPP was designed to replace the Directorate General of Taxation. It was expected that the taxation will be managed by an autonomous and independent institution.
The draft of the revision of UU KUP, which was submitted to DPR, mentioned the formation of a semi-autonomous tax institution. The BPP itself was designed to be independent from the Ministry of Finance.
Sri Mulyani stated that the tax reform should not be partial and be in line with the ongoing process, which has been running since ten years ago. In other words, the Ministry of Finance will re-submit the draft, after the ministry determining the ideal structure.
In the other hands, DPR or Parliament did not include the revision of UU KUP under the priority. When drafting national legislation program in 2017, the Legislative Body (Baleg) of DPR did not include the bill of UU KUP’s revision as one of 49 priorities bills discussed in the next year.
Vice Chairman of the Legislation Body at DPR Firman Subagyo said that there are 49 bills will be discussed in 2017, 40 of which continued from 2016.
This year, the Commission XI of DPR has been appointed to discuss the revision of UU KUP. However, the commission has just once held a discussion to form a working committee. However, to date the formation of the working committee also remains unclear.
Member of Commission XI Andreas Eddy Susetyo stated that the agenda of 2016 session period, which will be terminated on 9 December 2016, did not include the discussion on the revision of UU KUP.
“There were other priorities, such as the selection of Board of Governors of BI (the Central Bank) and the discussion on the budget submission from Financial Service Authority (FSA),” he said.
The Commission XI even could not ascertain when the discussions will be carried out. Vice Chairman of Commission XI Achmad Hafisz Tohir emphasized that the government must evaluate and revise the draft of UU KUP revision. While the discussion has not yet been held, the government could still revise a number of points, he said.
(Muhammad Farid/Translator)
