Regional Coordinator of Bandung School of Peace Indonesia, Fellow of IVLP the US Dept of State, Australia Awards for Indonesia, and Nuffic Nesso the Netherlands
A friend of mine said to me “I guess it would be such a loss for me if paying my tax without anything returning to me.” Another one said, “It is useless to pay tax finding out my tax is corrupted.” Another question appears: “If not paying tax, how can the State fund all the developments? Our public facilities require our tax money to operate.”
In Indonesia, currently, the number of refusals to pay tax is increasing, apparently due to various tax frauds and manipulations allegedly done by some tax officials. It begins with an investigation of MD (initial) who faced an allegation to attack the son of GP Ansor Caretaker and caused him to be in a coma state.
Surprisingly, this case led to the discovery that Dandy is the son of Rafael Alun, one of the General Directorate of Tax officials who has since been officially discharged from his position. He allegedly gained his unconventional amount of wealth due to tax money fraud and manipulation. It led to more disclosures of other tax officials’ wealth under the Ministry of Financial Affairs’ supervision. For example, the former Director of Examination and Collection of the General Directorate of Tax of the Ministry of Financial Affairs, Angin Prayitno Aji, was found guilty of gratification and money laundering. Those cases prompted the Authorities to investigate all units, not only the General Directorate of Tax but also the Customs, as they have the potential for corruption and fraud, for example, bribery and markups.
Anthony Budiawan, Managing Director of Political Economy and Policy Studies (PEPS) is calling on the Minister of Financial Affairs, Sri Mulyani to be more vigilant regarding all corruption and fraud cases involving her subordinating units. Budiawan believes it is essential to investigate the highest supervisors, the General Directorate of Tax and the Minister of Financial Affairs, and Rafael Alun and his subordinates and the examining teams. All of these events are similar to the “iceberg” phenomenon, as they will lead to the uncovering of many hidden cases. It is important to address these issues thoroughly to restore public trust in the government’s financial system and encourage continued tax compliance.
Be Compliant or Incompliant?
The story of the Indonesian tax official’s fraud and manipulation has raised deep concerns among societies regarding their paid taxes. At the same time, many tax officials and their family members have shown off their wealth on social media, commonly called “flexing”. They are showcasing their lavish lifestyles from luxury cars, bags, houses, travel, and private parties.
In Mario Dandy’s case, his conviction for violence shed light on his flaunted possessions leading to further investigations into his family’s wealth. His father, Rafael Alun, was also investigated due to his tremendous wealth, which suggests an unorthodox method of acquisition. This circumstance has created public suspicion towards all public officials regarding their wealth. Furthermore, the public has gradually revealed that some tax and Ministry of Finance officials possess an uncommon amount of wealth, which suggests possible unscrupulous means of acquisition.
In response to corruption and manipulations by current tax and Ministry of Finance officials, a new movement to refuse to pay taxes emerges. This movement remains anonymous, which raises questions, but its popularity is growing as it is a countermeasure to fight against the corrupt government system. Taufik Ahmad, the Executive Director of the Institute for Development of Economics and Finance (Indef), highlighted that this movement may have an impact on people’s compliance to pay their taxes. He added that this reaction has sparked among individual taxpayers, suggesting an alert to make them incompliant in reporting their tax reports. On the other hand, regardless of people’s disappointment in seeing the circumstance, the movement could undermine the government’s effort to increase revenues from taxes that can be allocated for proper public services.
Back in 2022, a similar movement sparked through the hashtag “Stop Bayar Pajak” (Stop Paying Taxes) on Twitter. This movement was a response to the Tax Amnesty Policy designed by the Ministry of Finance, which aimed to target high-income individuals or companies that discreetly hid their earnings from tax officers. The policy generally provided them some ease in preventing sanctions or fines due to hindering tax examinations. However, Deo Damini highlighted on CNBC Indonesia that this policy tends to “hurt” compliant taxpayers because it applies to those who discreetly hide their incomes and wealth, as mentioned above. In light of the situation highlighting some state tax officials with high amounts of flaunted wealth allegedly gained unscrupulously, the movement of refusing to pay taxes currently intertwines with anti-tax official sentiments that challenge the government’s capability to overcome corruption and fraud issues in the country.
What Will the Government Do Next?
The government reacts negatively to the movement of refusing to pay taxes, as it negatively impacts the country’s development, which aims to improve the citizens’ lives properly. Lately, the Ministry of Finance has been working seriously on this issue, making improvements both externally and internally. Sri Mulyani, the Minister of Finance, emphasizes that all paid taxes will be documented in the state budget and allocated for the country’s infrastructure development, people in need, and state interests. Indonesia’s Vice President, Maaruf Amin, comments that the above-mentioned fraud issue should not cause all citizens to refuse to report and pay their tax obligations.
The financial corruption and fraud committed by some of the Indonesian tax officials should not be the sole reason for Indonesian society to refuse to pay their taxes despite the society’s doubt to see the Government’s comprehensive acts to overcome this issue. Overall, this case is crucial for the Ministry of Finance and its working units to restore society’s trust in paying their taxes and make the institution more reliable publicly. Despite this issue, the government still relies on Indonesian society’s tax payments to finance the country’s continuous development in all sectors.
The next question is whether the Ministry is reliable enough to uncover all instances of corruption and fraud within its working unit. We will have to wait and see how seriously this institution takes on the challenge of overcoming these issues while regaining the trust of all Indonesians
