"A man writes because he doubts, because he is tormented."

Friday, July 8, 2011

Some Objections to Some Objections

When I happen to read a post on an online forum regarding the government plan to launch tax canvassing/tax census, I can't help but pondering: why they (particularly youths) are becoming so fatalistic and hostile towards every government plans. Indeed, after Gayus case, public displayed resentment towards tax officers and Directorate General of Tax in general (despite its bureaucracy reform program). But then again without tax, this country will surely crippled, and if we just sit down and think clearly, some rational discourses are more healthy than just flaming and trolling on the commentary section.

In this post, I am not going to give commentary on the tax canvassing program, but more into some objections threw by commenter in the forum aforementioned.

First objection is about how death penalty for corruptors is more preferable to solve the problem of government accountability. My objection, (which was also posted on that forum, go find it which one), is that a) China that condones capital punishments for corruptors flunked its rank from 72 in 2008 to 79 in 2009 in world's Corruption Perception Index, albeit performed slightly better to be number 78 in 2010. And b) 3 cleanest countries in this world (Denmark, New Zealand, and Singapore) do not have death penalty in their judicial systems. What does it show? Looking on its performance in China during these recent years, the existence of death penalty isn't giving drastic betterment (despite its drastic shock element) in China's CPI rank (not to mention its fall in 2009), yet then again government accountability can be achieved not necessarily via such terrifying measure if we take a look on the top 3 countries.

Yet, if we take a look into the sense of justice according what is actually demanded by society (if retributive justice is indeed deemed as the oh so majestic justice), it just doesn't make sense. How could you put number on human's life? Let's say the law states death as maximum sentence for corruption that is more than 1 billion rupiah, how could the one who do corruption of 999 millions rupiah be exempted from death despite essentially inflict same level of damage? But if the law doesn't state exact number for the money corrupted, then what constitute a maximum damage in corruption case? Putting numbers on human life, in this case, is not just at all. If you steal something, you don't need to die, you just need (for instance) to give your money back. Why?

a) It's more tangible
b) It's retributively more just (after all, what is needed for society is the money, not the corruptor's death)
c) In the sense of giving deterrent effect, it also gives deterrent effect, as psychologically people have emotional attachment to money (who wants to be deprived of his money?)

But, aside from that, just by putting them 15 years in jail, deprive them from temporary freedom of movement and communication to family, why wouldn't people be afraid of that?

On the other hand, one should not undermine the accountability measure that Indonesia has right now. Inside Directorate General of Tax, they have Directorate of Internal Compliance and Transformation of Apparatus Resources (Direktorat Kepatuhan Internal dan Transformasi Sumber Daya Aparatur/KITSDA) where you can post complaints for any deviant conduct by tax officers. Or Kring Pajak 500200, where you can do the same thing. Inside Ministry of Finance, there are two internal auditor bodies, Inspectorate General (Inspektorat Jendral/Itjen) and State Development and Finance Surveillance Agency (Badan Pengawasan Keuangan dan Pembangunan/BPKP). Outside from Ministry of Finance, we have Supreme Audit Body (Badan Pemeriksa Keuangan/BPK), Taxation Supervisory Committee (Komite Pengawas Perpajakan) and NGOs like Transparency International or Indonesia Corruption Watch.

Second thing I'd like to object was the notion that government that has big chunk of its revenue from tax is a vile government and akin to some gangsters or so, thus we need to maximize export import instead.

I can't believe that although the commenter said he knew economic concept, he didn't knew that export import is not a part from government revenue. Ex-im is part of GDP, and done by private sectors (yet government can get tax from that). Contrary from USA that fulfills 2,17 trillion dollar from its need of 3,87 trillion spending from tax (and the rest from loans), we have alternative sources of income that is Penerimaan Negara Bukan Pajak/PNBP (non-tax revenues) which accounted for 21,6% of our budget (as per 2010). But if he was indeed to think about the concept of revenue sharing from state owned enterprises or revenue from natural resources that are included in PNBP (that in their operation might be exporting something, like in mining companies) maximizing them is not enough to support government budget (not to mention, mining activities are exploitative and unsustainable), as some state owned companies, in fact, are wasting budget and inefficient.

But, let's take a look, does tax in Indonesia restrains us so much? If we use the parameter of tax to GDP ratio (portion of domestic products that is taxed), Indonesia is quite low by accounting for only 11%, compared to Germany (40,6%), France (46,1%), US (26,9%), and UK (39%). If we use the parameter of fiscal freedom used by Heritage Foundation, Indonesia, once again, fares better by having score of 83,0 compared to Germany (58,5), France (52,3), United Kingdom (52,0) and United States (68,3). If we compare Indonesia from income tax tariff to Germany, on the personal income tax, the highest rate of personal income in Indonesia is 30% compared to Germany of 41% and 45%. On corporate income, our tax tariff is 25% (on fiscal year 2010 onwards) not to mention its facility (article 31 E of Indonesian Income Tax Act) of 50% tax cut for companies with gross circulation of 50 billion rupiah and below and taxable income of 4,8 billion rupiah and below. Germany? 29,6% on average.

This is by no mean I'm supporting corruption or whatever. Corruption is an abhorrent act, and it remains so, but killing the perpetrator is unnecessary to be done. On the other hand, we should be grateful (now) that Indonesia is not a gangster government, contrary to what people may perceive.


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