INDONESIA is a country that adheres to a self-assessment tax system where taxpayers must play an active role in fulfilling their tax obligations, starting from calculating themselves, depositing, and reporting them to the tax administration (Diskus).
Fiskus has the function of serving, fostering, and supervising the implementation of taxation by taxpayers by conducting audits to test taxpayer compliance as mandated by Law Number 28 of 2007 concerning General Provisions and Tax Procedures.
Based on the authority to carry out the examination, the DGT has the right to issue SKP and STP following the results of the examination carried out objectively and professionally based on audit standards.
Differences in the calculation of the amount of tax payable or the implementation of the collection which is considered by the Taxpayer to be incorrect or not complying with the procedures according to the law often lead to tax disputes.
Dispute resolution is an important thing to pay attention to in providing justice and legal certainty for taxpayers. Based on the 2011-2015 DGT Annual Report, the distribution of the number of disputes and lawsuits based on the decisions received by the DGT increased significantly.
Based on the statistical data on the decision of the Tax Court above, it can be seen that the majority of the Tax Court’s decisions are to grant the Taxpayer’s application. That means, in the tax dispute resolution process at the appeal level, the DGT loses more in the Tax Court’s decision.
Transparency and Independence
Why did it happen? Several factors underlie the cause of the defeat of the DGT when resolving appeals/lawsuits in the Tax Court. These factors include, First, the problem of transparency of decisions in the Tax Court.
As a country that adheres to democratic principles, every public body must provide information quickly, on time, at a low cost, and in a simple way so that the public’s needs in obtaining information are met transparently.
This is regulated in Article 2 paragraph (1) of Law Number 14 of 2008 concerning Openness of Public Information that all information related to the public interest is open and accessible to every user of information.
However, the fact is that this does not happen in the Tax Court as a public body. The attitude of closedness is still so strong that it often creates negative assumptions by many parties.
Moreover, the administration of court decisions that did not go well caused some parties to experience difficulties in accessing accountability for these decisions. Of course, this situation is contrary to the principle of open justice.
Whereas in Article 18 paragraph (1) letter a UU KIP states that judicial decisions are not included in the category of excluded information. This provision is also strengthened by the Supreme Court Decision Number: 1-114/KMA/SK/I/2011 point C.2 which states that all court decisions and decisions, whether legally binding or not, are information that must be available at any time and can be accessed by the public. public.
Second, is the weak independence of the examiner. In the context of law enforcement in the field of taxation, the DGT conducts audits to test business transactions based on actual financial data to calculate the amount of tax payable.
The audit system should be able to encourage the correctness and completeness of income reporting, submission, collection, withholding, and deposit by taxpayers. However, in practice, auditors often carry out inspections using models of approaches that are not supported by adequate evidence, such as an indication of the flow of goods and the flow of accounts receivable.
This is done by the auditor solely to secure the tax receipts charged to their respective office units so that the examiner will make every effort to determine the maximum tax possible and at the same time withhold the tax refund request requested by the Taxpayer.
Third, is the judge’s lack of knowledge about Indonesian taxation. The most important factor in determining the decision on tax disputes is the judge’s belief which is based on a statutory regulation in the field of taxation.
In the Tax Court, the background of the judge who makes the decision should be a person who understands and understands how to calculate accounting and taxation so that when in court it does not cause different arguments.
Often the difference in argumentation occurs because the background of the judge who makes the decision is purely a legal person who does not understand the accounting and tax calculation mechanisms in Indonesia. This of course raises problems that affect the results of tax dispute decisions.
Fourth, the data relating to the disputed material is only given by the taxpayer at the trial and considered by the panel of judges. One of the considerations used by the Panel of Judges of the Tax Court in deciding a tax dispute during the appeal process is the assessment of each piece of evidence presented in the trial.
Taxpayers often choose not to show and lend documents/evidence during the audit process and objection research because Taxpayers are worried if the Fiskus interprets the documents/evidence differently.
The document/evidence is then given only during the trial process at the Tax Court, even though the document/evidence already existed during the examination process and objection research but was not requested by the Fiskus because it was not included in the tax regulations such as daily report data. If that happens, the Tax Court will likely grant the Taxpayer’s appeal and cancel the objection decision.
Fifth is the lack of human resources in the Tax Court. As a judicial institution, the Tax Court was established to ensure that tax collections carried out by state civil servants are by the provisions of the applicable laws and regulations.
In addition, the Tax Court also plays a role in providing justice and legal certainty in resolving disputes in the taxation sector. Therefore, in strengthening the function of the Tax Court, human resources are needed who have competence in the fields of law, taxation, and accounting.
This is important so that the case settlement process in the Tax Court can run optimally. However, the fact is that the number of HR of the Tax Court according to these criteria is very minimal, especially for judges who have little interest.
This is inversely proportional to the number of disputes handled each year, the number of which tends to increase. Data for 2015, the Tax Court has 47 judges divided into 18 assemblies.
Meanwhile, the number of tax disputes in 2015 that must be handled amounted to 11,284 files. Of course, the number is not balanced. To overcome this problem, DGT should accelerate the development of the Tax Court Tax Application Information Technology System (STIAPP), which is still only in the form of discourse.
The problems above are classic problems that the DGT must face every time it receives an appeal/lawsuit from a Taxpayer in the tax dispute resolution process which results in a large number of Taxpayer’s applications being granted in the Tax Court.
Therefore, the DGT must make comprehensive efforts to minimize the number of taxpayer appeals so as not to disturb the credibility of the DGT as a super body in national tax revenue.
These efforts include evaluating the management of related directorates such as the Directorate of Audit and Collection to improve the quality of audits that are supported by strong evidence, the Directorate of Tax Regulations to provide input for improving provisions that often cause disputes in the field, as well as improving organizational governance and business processes through the Directorate of Internal Compliance and HR Transformation.