Presentasi AAAA v1- DJP
Ministry of Finance of the Republic of
Indonesia
Directorate General of Taxes
Directorate of Tax Regulations II
FRAUD AND DECEPTION IN
FINANCIAL REPORTING:
A PERSPECTIVE OF
INDONESIA TAX AGENCY
1
Fraud and deception in financial
reporting is a worrisome
phenomenon, in particular, but not
only, in times of economic crises
when tax bases decline while needs
increase
Role of Tax Revenue in Government Budget
Ratio of Tax Revenue to Total
Budget Revenue (Percent)
Tax Revenue and Total Budget
Revenue (Billion Rupiah)
1,800,000
77.00
1,600,000
76.20
76.00
1,400,000
75.00
1,200,000
1,000,000
74.87
74.00
800,000
73.28
73.00
72.67
600,000
72.00
400,000
200,000
72.19
71.00
2010
2011
Tax Revenue
Source: Badan Pusat Statistik
2012
2013
Total Budget Revenue
2014
70.00
2010
2011
2012
2013
2014
• Tax authority uses financial information to
assess taxpayers’ adherence to tax laws
under the self assessment regime
• One of the greatest risks to tax authority is
the risk that the financial information upon
which they rely is materially misstated,
either erroneously or intentionally
• When such financial information is
misstated by any scheme, artifice, or device
with the intent to mislead tax authority,
then efforts to redistribute income and
establish economic equity will also be
distorted.
Indonesia’s Gini Index
0.42
0.41
0.41
0.41
0.41
0.41
2011
2012
2013
2014
0.41
0.4
0.4
0.39
0.39
0.38
0.38
0.38
0.37
0.37
2010
Source: Badan Pusat Statistik
Persen
Tax Ratio and Tax Buoyancy
12.00
2.50
11.50
2.00
11.00
1.50
10.50
1.00
10.00
0.50
9.50
2010
2011
Tax Ratio (%, kiri)
Source: Badan Pusat Statistik
2012
2013
Tax Buoyancy (kanan)
0.00
2014
Tax Ratio of Indonesia and Neighboring
Countries
20
18
16
14
Percent
12
10
8
6
4
2
0
2006
2007
2008
Malaysia
Source: World Bank
2009
Philippina
2010
Thailand
2011
Indonesia
2012
LAW NO. 6/1983 ON THE
GENERAL PROVISIONS AND PROCEDURES
OF TAXES
AS LASTLY AMENDED BY LAW NO. 28/2007
Article 38
Whomsoever, due to his negligence:
a. fails to file a Tax Return; or
b. files an incorrect or incomplete Tax Return, or
attaches incorrect information,
which may cause losses to the revenues of the
state, and this is conducted as a conduct after the
first one referred to in Article 13A, shall be fined by
at least 1 (one) time the amount of unpaid or
underpaid tax, or by imprisonment for a minimum
of 3 (three) months or a maximum of 1 (one) year.
LAW NO. 6/1983 ON THE
GENERAL PROVISIONS AND PROCEDURES
OF TAXES
AS LASTLY AMENDED BY LAW NO. 28/2007
Article 39 Paragraph 1
Whomsoever deliberately :
a. fails to register for a Taxpayer Identification Number, or
fails to register his business to be confirmed as a Taxable
Person for Value Added Tax Purposes;
b. misuses or uses without authority, a Taxpayer
Identification Number or Confirmatian of Taxable Person for
Value Added Tax Purposes Number;
c. fails to file a Tax Return;
d. files a false or incomplete Tax Return and or information;
e. refuses to be audited as referred to in Article 29;
f. shows an account, record or other document that is false
or forged, or does not reflect the truth;
Article 39 Paragraph 1 (Cont.)
g. fails to maintain bookkeeping or records in lndonesia, or
fails to show or make available accounts, records or other
documents;
h. fails to keep books, records, or documents upon which the
bookkeeping or recording is based and other documents
including an output of data processing that is managed
electronically or handled as on-line applications in
lndonesia as referred to in paragraph (11) of Article 28; or
i. fails to remit tax already withheld or collected;
which may cause losses to the revenues of the state, shall be
penalized by imprisonment for a minimum of 6 (six) months or
a maximum of 6 (six) years and a minimum fine equal to 2
(two) times the amount of unpaid or underpaid tax and a
maximum fine equal to 4 (four) times the amount of unpaid or
underpaid tax.
Tax Compliance in Indonesia
The Number of Registered
Taxpayer
The Number of Registered Taxpayer are required to
report SPT
Year
2012
2013
Registered Taxpayers
22,564,969
24,886,638
Registered taxpayers are
17,659,278
17,731,736
required to report SPT
compliance ratio target
the realization of annual
income tax returns
Compliance ratio
the achievement of
compliance ratio
Source: Directorate PKP DG Tax
The Number of
SPT
Compliance
ratio
2014
27,942570
18,357,833
2015
30,456,809
18,159,840
62,50%
65,00%
70,00%
70,00%
9,237,947
9,964,862
10,848,429
10,508,959
52,31%
83,70%
56,20%
86,46%
50,09%
84,42%
57,87%
82,67%
A Challenging Future
Tax Revenue Projections
2015-2019 (Trillion Rupiah)
2,500.0
2,068.8
2,000.0
1,771.2
1,524.9
1,500.0
1,244.7
1,320.0
1,000.0
500.0
2015
Source: Directorate PKP DG Tax & BKF
2016
2017
2018
2019
Tax Revenue Growth Projections
2016-2019 (percent per year)
18.0
15.5
16.0
16.2
16.8
14.0
12.0
Persen
10.0
8.0
6.0
6.0
4.0
2.0
2016
Source: Directorate PKP DG Tax & BKF
2017
2018
2019
Taxation Strategies for the Next Five
Years
1) Massive use of information
technology to monitor taxpayers
2) Expansion of witholding taxes
3) Improving access to third parties’
data
Thank You
Indonesia
Directorate General of Taxes
Directorate of Tax Regulations II
FRAUD AND DECEPTION IN
FINANCIAL REPORTING:
A PERSPECTIVE OF
INDONESIA TAX AGENCY
1
Fraud and deception in financial
reporting is a worrisome
phenomenon, in particular, but not
only, in times of economic crises
when tax bases decline while needs
increase
Role of Tax Revenue in Government Budget
Ratio of Tax Revenue to Total
Budget Revenue (Percent)
Tax Revenue and Total Budget
Revenue (Billion Rupiah)
1,800,000
77.00
1,600,000
76.20
76.00
1,400,000
75.00
1,200,000
1,000,000
74.87
74.00
800,000
73.28
73.00
72.67
600,000
72.00
400,000
200,000
72.19
71.00
2010
2011
Tax Revenue
Source: Badan Pusat Statistik
2012
2013
Total Budget Revenue
2014
70.00
2010
2011
2012
2013
2014
• Tax authority uses financial information to
assess taxpayers’ adherence to tax laws
under the self assessment regime
• One of the greatest risks to tax authority is
the risk that the financial information upon
which they rely is materially misstated,
either erroneously or intentionally
• When such financial information is
misstated by any scheme, artifice, or device
with the intent to mislead tax authority,
then efforts to redistribute income and
establish economic equity will also be
distorted.
Indonesia’s Gini Index
0.42
0.41
0.41
0.41
0.41
0.41
2011
2012
2013
2014
0.41
0.4
0.4
0.39
0.39
0.38
0.38
0.38
0.37
0.37
2010
Source: Badan Pusat Statistik
Persen
Tax Ratio and Tax Buoyancy
12.00
2.50
11.50
2.00
11.00
1.50
10.50
1.00
10.00
0.50
9.50
2010
2011
Tax Ratio (%, kiri)
Source: Badan Pusat Statistik
2012
2013
Tax Buoyancy (kanan)
0.00
2014
Tax Ratio of Indonesia and Neighboring
Countries
20
18
16
14
Percent
12
10
8
6
4
2
0
2006
2007
2008
Malaysia
Source: World Bank
2009
Philippina
2010
Thailand
2011
Indonesia
2012
LAW NO. 6/1983 ON THE
GENERAL PROVISIONS AND PROCEDURES
OF TAXES
AS LASTLY AMENDED BY LAW NO. 28/2007
Article 38
Whomsoever, due to his negligence:
a. fails to file a Tax Return; or
b. files an incorrect or incomplete Tax Return, or
attaches incorrect information,
which may cause losses to the revenues of the
state, and this is conducted as a conduct after the
first one referred to in Article 13A, shall be fined by
at least 1 (one) time the amount of unpaid or
underpaid tax, or by imprisonment for a minimum
of 3 (three) months or a maximum of 1 (one) year.
LAW NO. 6/1983 ON THE
GENERAL PROVISIONS AND PROCEDURES
OF TAXES
AS LASTLY AMENDED BY LAW NO. 28/2007
Article 39 Paragraph 1
Whomsoever deliberately :
a. fails to register for a Taxpayer Identification Number, or
fails to register his business to be confirmed as a Taxable
Person for Value Added Tax Purposes;
b. misuses or uses without authority, a Taxpayer
Identification Number or Confirmatian of Taxable Person for
Value Added Tax Purposes Number;
c. fails to file a Tax Return;
d. files a false or incomplete Tax Return and or information;
e. refuses to be audited as referred to in Article 29;
f. shows an account, record or other document that is false
or forged, or does not reflect the truth;
Article 39 Paragraph 1 (Cont.)
g. fails to maintain bookkeeping or records in lndonesia, or
fails to show or make available accounts, records or other
documents;
h. fails to keep books, records, or documents upon which the
bookkeeping or recording is based and other documents
including an output of data processing that is managed
electronically or handled as on-line applications in
lndonesia as referred to in paragraph (11) of Article 28; or
i. fails to remit tax already withheld or collected;
which may cause losses to the revenues of the state, shall be
penalized by imprisonment for a minimum of 6 (six) months or
a maximum of 6 (six) years and a minimum fine equal to 2
(two) times the amount of unpaid or underpaid tax and a
maximum fine equal to 4 (four) times the amount of unpaid or
underpaid tax.
Tax Compliance in Indonesia
The Number of Registered
Taxpayer
The Number of Registered Taxpayer are required to
report SPT
Year
2012
2013
Registered Taxpayers
22,564,969
24,886,638
Registered taxpayers are
17,659,278
17,731,736
required to report SPT
compliance ratio target
the realization of annual
income tax returns
Compliance ratio
the achievement of
compliance ratio
Source: Directorate PKP DG Tax
The Number of
SPT
Compliance
ratio
2014
27,942570
18,357,833
2015
30,456,809
18,159,840
62,50%
65,00%
70,00%
70,00%
9,237,947
9,964,862
10,848,429
10,508,959
52,31%
83,70%
56,20%
86,46%
50,09%
84,42%
57,87%
82,67%
A Challenging Future
Tax Revenue Projections
2015-2019 (Trillion Rupiah)
2,500.0
2,068.8
2,000.0
1,771.2
1,524.9
1,500.0
1,244.7
1,320.0
1,000.0
500.0
2015
Source: Directorate PKP DG Tax & BKF
2016
2017
2018
2019
Tax Revenue Growth Projections
2016-2019 (percent per year)
18.0
15.5
16.0
16.2
16.8
14.0
12.0
Persen
10.0
8.0
6.0
6.0
4.0
2.0
2016
Source: Directorate PKP DG Tax & BKF
2017
2018
2019
Taxation Strategies for the Next Five
Years
1) Massive use of information
technology to monitor taxpayers
2) Expansion of witholding taxes
3) Improving access to third parties’
data
Thank You