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🇮🇩 Indonesia /Economy & Trade

Indonesian Tax Oversight Plan Could Intimidate Public, Warns Think Tank

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Indonesia's Strategic and Economic Action Institution (ISEAI) warns that involving village and community security officials in tax compliance oversight could intimidate taxpayers.
  • ISEAI Senior Analyst Ronny P. Sasmita stated that the presence of military and police personnel, even without direct enforcement roles, may create psychological pressure, particularly on small businesses and ordinary citizens.
  • The institution recommends clear guidelines for these officials, limiting their role to administrative support and establishing accessible complaint mechanisms to address potential intimidation and build taxpayer trust.

The involvement of Indonesian village and community security officials in monitoring taxpayer compliance risks creating a climate of fear, according to the Indonesia Strategic and Economic Action Institution (ISEAI). Senior Analyst Ronny P. Sasmita expressed concern that the strong social standing of military and police personnel could psychologically intimidate taxpayers, especially small business owners and the general public.

"Formally, they are not conducting inspections or enforcing the law," Sasmita told Tempo. "However, for small business owners or the general public, the situation can feel like the state has arrived with full force." He argued that healthy tax compliance should stem from trust, not implicit pressure.

Formally, they are not conducting inspections or enforcing the law. However, for small business owners or the general public, the situation can feel like the state has arrived with full force.

— Ronny P. SasmitaISEAI Senior Analyst Ronny P. Sasmita explaining the potential psychological impact of involving security officials in tax compliance.

To mitigate this, ISEAI suggests the government implement clear safeguards. The role of village guidance officers (Babinsa) and community security and order guidance officers (Bhabinkamtibmas) should be strictly limited to administrative support, avoiding direct interaction with taxpayers on tax matters. The Directorate General of Taxation also needs to enhance public communication, openly explaining that these officials are purely administrative assistants, not involved in tax oversight or enforcement.

Furthermore, ISEAI urges the tax authority to provide easily accessible complaint channels for individuals who feel intimidated. Sasmita highlighted that the primary challenge is not the formal explanation but the potential for a "trust deficit" among the public. He stressed that public perception is as crucial as the policy's substance in taxation, as public discomfort can render technically sound policies counterproductive. ISEAI also proposed regular public evaluations of the policy's implementation to ensure accountability.

So village officials and the like coordinate with us, not that they then...

— Bimo WijayantoDirector General of Taxation Bimo Wijayanto clarifying the role of village officials in tax matters.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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