by: Jakarta Globe
A senior Finance Ministry official has conceded that higher salaries instated as part of efforts to reform the graft-riddled tax department have not been as effective as was hoped, following the recent arrests of two tax officials for bribery.
Ki Agus Badaruddin, the ministry’s secretary general, said in Bandung on Saturday that the higher remunerations for tax officials “are no guarantee that people will not steal.”
He added that a series of high-profile cases involving tax officials accused of taking bribes from corporate and individual taxpayers seeking to evade their full tax obligations had resulted in mounting calls from the public for the higher salaries paid to tax officials to be cut.
Ki Agus said the higher salaries, introduced for the tax and customs and excise departments in 2006 by Sri Mulyani, acting finance minister at the time, were intended to curb the practice of officials taking bribes.
“If we want to clean up the bureaucracy, we have to remunerate officials with an amount that allows them to maintain a decent standard of living,” he said as quoted by Antaranews.com.
If officials continued taking bribes even with the higher salary, he went on, then the problem was with those individuals.
“If corruption continues, that means the individual in question is accustomed to it. We can’t fully eliminate bribery just by raising the salary of officials, because no matter how much we pay, the amount will not be as high as the bribes,” Ki Agus said.
He stressed that despite the number of recent arrests of tax officials for bribery, the majority of officials were clean.
He also said the Finance Ministry was tightening up its recruitment process for tax and customs officials, as well as regularly evaluating the progress of reforms and implementing measures to prevent bribery and other offenses.
“If we stopped trying to tackle this problem, it would leave the country in ruins,” Ki Agus said. “We can’t allow the practices of a few individuals to defeat us.”
His statements came just days after investigators from the Corruption Eradication Commission (KPK) arrested two tax officials for allegedly accepting bribes from a steel company.
Muhammad Dian Irwan Nuqishira and Eko Darmayanto, an investigator and an auditor, respectively, at the East Jakarta tax office, were arrested at Soekarno-Hatta International Airport last Wednesday along with two officials from the Master Steel company while allegedly transacting a S$300,000 ($241,000) bribe.
Fuad Rahmani, the Finance Ministry’s director general of taxation, welcomed the arrest as crucial in helping weed out dirty officials in his office.
“Ongoing reforms in human resources management will continue until all those with issues get caught and fired, and even sent to jail,” he said.
Hatta Rajasa, the acting finance minister, also said he appreciated the KPK’s efforts to help clean up the tax office by arresting the two officials.
“I just heard about the arrest and I think the KPK has done the right thing,” he said.
Last week’s incident came less than a month after the KPK arrested another tax official, Pargono Riyadi, in Jakarta for allegedly extorting a payment of Rp 125 million from Asep Hendro, a former race car driver and auto dealer.
Last year, the tax office was rocked by an even bigger scandal in which authorities discovered a fortune in rupiah, dollars and gold in bank accounts belonging to tax official Dhana Widyatmika, who was later sentenced to seven years in prison for taking bribes in exchange for lowering a company’s tax obligations from Rp 127 billion to just Rp 30 billion.
The case was reminiscent of that of Gayus Tambunan, who was likewise sentenced to a seven-year term in 2011 after investigators found more than Rp 100 billion in his bank accounts.
He later received multiple additional sentences for bribing his way out of jail while ostensibly on remand, for using a fake passport to travel overseas and for bribing a judge, prosecutors and police investigators in an earlier trial for embezzlement in which he was acquitted.
Following Dhana’s case, in June 2012, the KPK arrested Tommy Hendratno, a tax official in Sidoarjo, East Java, for taking bribes estimated at Rp 280 million.
Indonesia booked Rp 980 trillion in tax revenues in 2012, missing its previously set target of Rp 1,016 trillion.
This article was written by Jakarta Globe and originally published on thejakartaglobe