Organizational Performance 91
Overview
2022 AnnualReport
Valuation Objects Total of Valuation
Reports
Valuation Result Value
(billion Rp) Sales Value of Taxable Object - Field 1,390 523,926 Sales Value of Taxable Object - Office 9,673 13,514,968
Property I 3,964 7,058
Property II 774 69,331
Business I 656 90,048
Business II 643 171,940
Intangible Assets 36 2,697
Total 17,136 14,379,968
Note:
Detailed criteria for Property I, Property II, Business I, and Business II are set out in Director General of Taxes Circular Letter No. SE-54/PJ/2016.
Source: Appraisal app as of December 31, 2022, Directorate of Tax Extensification and Valuation
Notices of Land and Building Tax Payable P5L issued in 2022
10,603
92 Organizational Performance
Overview 20
Annual 22
Report
DGT implemented strategies in Preliminary Investigation in 2022 as follows:
a. utilization of data and information related to law enforcement in the form of joint investigation activities between DGT and the Directorate General of Customs and Excise (DJBC);
b. implementation of case building in order to equalize law enforcement based on local wisdom or dominant sector based on CRM;
c. competency improvement of Civil Servant Investigator (PPNS) through technical guidance and Preliminary Investigation assistance;
d. establishment of a Task Force for Handling State Owned Enterprises/Local Owned Enterprises (BUMN/BUMD) that do not withhold VAT that has been collected in 2022 and whose task is to follow up on tax crime handling on tax invoices issued by withholding taxpayers who transact with BUMN/BUMD as VAT withholding agent and proof of payment has not been found; and e. drafting a redefinition policy of criminal acts
and tax administration violations through implementing cooperation programs with donor agencies.
Preliminary Investigation is carried out by a Preliminary Investigator who is assigned based on Preliminary Investigation Audit Warrant (SPPBP). At the beginning of 2022, DGT had 617 SPPBP arrears that must be resolved which are carried over from the previous year. As for the issuance of new SPPBP in 2022 is 617 letters. Furthermore, the completion of preliminary investigation throughout 2022 reached 696 reports. Details of the performance of the completion of preliminary investigation can be seen in the following table.
Description Total
A. Initial Overdue 617 letters
B. Issuance of Preliminary Investigation Audit Warrant
(SPPBP) 617 letters
C. Completion:
Proposal of investigation 233 reports
Article 8 paragraph (3) of Law on General Provisions
and Tax Procedures 417 reports
Summary 46 reports
Number of completions 696 reports
D. SPPBP Cancellation 26 letters
E. FInal overdue (A+B-C-D) 512 letters
Extra effort revenue from prelimenary investigation
and investigation Rp1.62 trillion
Description:
• Article 8 paragraph (3) of Law on General Provisions and Tax Procedures, the taxpayer is conducting Disclosure of Untruthful Actions.
• Summary is a type of report issued on cancelled preliminary investigation on the grounds that no preliminary evidence is found, the event is not a criminal offense, and the individual taxpayer conducted preliminary investigation passed away.
• Number of completion of preliminary investigation based on the number of SPPBP. The settlement of Preliminary Investigation between two SPPBPs or more on the same taxpayer are completed in one LPBP.
• Cancellation of SPPBP is the cancellation of SPPBP that has been issued, due to:
- change of preliminary investigation from closed to open;
- change in the Implementation Unit of Preliminary Investigation due to reorganization;
- administrative errors such as writing names, NPWP, or suspected criminal events;
- before the SPPBP is submitted to the investigated taxpayer, the taxpayer has submitted Asset Amnesty Letter
• There is a joint KPI for revenue from preliminary investigation and investigation.
Source: Directorate of Law Enforcement Preliminary Investigation Performance, 2022
Organizational Performance 93
Overview
2022 AnnualReport
2. Investigation
Tax crime Investigation is a series of actions carried out by investigators to seek and collect evidence with which to disclose the tax crime that occurred and find the suspect. Tax Crime Investigation can only be conducted by certain tax investigator in DGT who are specifically authorized as Tax Crime Investigator.
In order to encourage the optimization of investigation, DGT made the following efforts in 2022:
a. implementation of thematic investigation based on local wisdom and the optimization of tracking, blocking, and/or confiscation of assets that have a high probability of recovering losses to state revenue. In addition to optimize the collection of state revenue, this activity also aims to provide a deterrent effect to the tax criminal and a fear effect for potential tax criminal;
b. strengthening the role of judicial institutions and law enforcement officers in handling tax crime and joint training related to tax crime with judges, prosecutors, and Supervisory Coordinator of Tax Crime Investigator;
c. establishment of a Task Force for Assistance in Handling Cases of Crimes in the Field of Taxation, Money Laundering, and Asset Tracing involving the Financial Transaction Reports and Analysis Center (PPATK), the Attorney General’s Office, and the Tax Investigator Corps Bureau of the National Police Criminal Investigation Agency (Bareskrim);
d. preparation of investigation regulations and draft of Joint Decree between the Minister of Finance and the Head of Corruption Eradication Commission (KPK) regarding the handling of tax crime and corruption crimes;
e. investigation cooperation between cross-border institutions outside the scope of international cooperation system in the field of crime prevention and eradication (Mutual Legal Assistance) and implementing Pilot Project 2022 between DGT and Internal Revenue Service (IRS);
f. improvement of investigation information system and synchronization and exchange of investigation data between DGT, the Attorney General’s Office, the Criminal Investigation Bureau of the National Police, and the Directorate General of Immigration
g. publication of tax crime investigation activities through the media Center for Financial Transaction Reports and Analysis internal and external media of DGT.
One of the obstacle of criminal law enforcement in the field of taxation is the potential for a different understanding of laws and regulations that can have implication for the disparity in the handling of tax crime cases. The organization of joint training among law enforcement agencies is one of DGT’s concrete actions to build collaboration, positive cooperation, and mutual understanding among law enforcement institutions in handling the tax crime cases. Through joint training activities, it is expected that the disparity in case handling that has occurred can be minimized while at the same time encouraging efforts to increase taxpayer compliance and optimize tax revenue.
The implementation of joint training between
law enforcement institutions is a real action
of DGT to build collaboration, positive
cooperation, and a mutual understanding
94 Organizational Performance
Overview 20
Annual 22
Report
In 2022, the joint training was successfully conducted in five batches involving stakeholders (Supreme Court, Attorney General’s Office, The Indonesian National Police, and internal DGT). The activity was attended by 454 participants who have duties and authority in handling tax crime cases in their institutions.
In terms of investigation performance, DGT issued 115 investigation warrants in 2022. In the process of completing the investigation files in 2022, 32 taxpayers disclosed the untruth of the act in accordance with Article 8 paragraph (3) of Law on General Provisions and Tax Procedures. Meanwhile, the number of investigation files declared complete by the Prosecutor’s Office (P-21 status) reached 98 files, and there were 16 files of termination of investigation related to the utilization of Article 44B of Law on General Provisions and Tax Procedures.
The state revenue lost Rp1.29 trillion in the completion stage of the investigation.
Furthermore, 45 case files obtained a verdict from the court with a total loss of state revenue totaling Rp679.8 billion, and fines reached Rp1.32 trillion.
Asset confiscation is one of the efforts to recover losses of state revenue conducted in as many as 54 activities, with a total value of assets seized reaching Rp315.1 billion.
Description Total
Issuance of Investigation Warrant 115 letters
Completion of investigation
Article 8 paragraph (3) of Law on General Provisions and Tax Procedures
Investigation files declared complete by the Prosecutor’s Office (P-21 status) and their equivalents:
- Tax crime
- Money laundering crime - Corporate case
- Article 48 of Law on General Provisions and Tax Procedures Losses of state revenue
32 taxpayers 93 files
4 files 1 files 16 files Rp1.29 trillion Files with verdict
Criminal with verdict Losses of state revenue Criminal fines
45 files Rp679.8 billion
Rp1.32 trillion
Asset confiscation 54 activities
Value of assets seized Rp315.1 billion
Notes:
Case files that are equalized, i.e. files where the investigation is terminated in the interest of state revenue as referred to in Article 44B of Law on General Provisions and Tax Procedures and files where the investigation is terminated in the context of Tax Amnesty as referred to in Article 44B of Law on General Provisions and Tax Procedures and files in which the investigation is terminated in the context of Tax Amnesty.
Source: Directorate of Law Enforcement
Of the 114 case files with P-21 status and the equivalent, one-third were cases with a modus operandi of filing false tax returns. Details of other modus operandi and the number of cases are set out in the following table.
Investigation Performance, 2022
Organizational Performance 95
Overview
2022 AnnualReport
Source: Directorate of Law Enforcement
3. Tax Collection
DGT conducted tax collection on tax arrears that must be payed by the taxpayers. According to Tax Law, a series of tax collection including reprimanding or warning, carrying out instant and simultaneous collection, notifying the Coerce Warrant, proposing prevention of escape, carrying out confiscation, carrying out imprisonment, and auctioning confiscated goods. All of these tax collection efforts aim to make the Taxpayer pay off the tax debt and tax collection costs.
In order to achieve well-targeted and qualified tax collection that can increase tax revenue and sustainable taxpayer compliance, DGT will carry out a number of efforts in the tax collection domain in 2022 as follows:
a. improve the quality and effectiveness of targeted tax collection actions through:
1) organizing the Disbursement Priority Target List (DSPC) for the taxpayers who will be subject to tax collection priority;
2) preparation of tax collection actions that include planning of tax collection activities during 2022, profiling and asset tracing of taxpayers by optimizing the data and information available in the DGT Information System, and
3) implementation of other tax collection support actions such as blocking Tax Bearer access to the Legal Entity Administration System (SABH) and blocking customs access;
b. improving the quality of implementation and supervision of comprehensive tax collection through coordination and collaboration of tax collection with internal and external parties, as well as supervision of the implementation of DSPC and tax collection performance achievements; and
c. improving the quality and quantity of supporting resources and orderly administration of tax collection.
In terms of tax collection performance in 2022, DGT has succeeded in disbursing tax receivables through tax collection reaching Rp14.07 trillion. This amount is inseparable from the ongoing tax collection efforts implemented by DGT.
Description Number of Cases
Issuing and/or using tax invoices not based on actual transactions 27
Filing inaccurate tax return 37
Withheld tax but not paid 13
Do not file tax return 26
Money laundering and corporate crime 5
Not registering for NPWP/Taxable Person for VAT Purposes Identification Number 6
Total 114
Tax Crimes Modus Operandi, 2022
96 Organizational Performance
Overview 20
Annual 22
Report
Source: Billing Performance Total accessed on March 10, 2023, Directorate of Tax Audit and Collection
Based on the challenges faced by DGT in the implementation of tax collection in 2022, some improvements continued to be pursued as follows:
a. adjusting regulations in the field of collection that are no longer relevant to the current situation. Namely, Minister of Finance Regulation No. 189/PMK.03/2020 on Procedures for Implementing Tax Collection of Tax Arrears that had not accommodated provisions regarding support actions for tax collection in the form of blocking access to public services;
b. strive for the availability of human resources for tax collection, namely Tax Bailiffs, who are qualified in terms of quantity and capacity; and
c. Build and develop a digital-based tax collection administration connected to third-party systems that can improve the efficiency and effectiveness of tax collection, one of which is the auction interconnection application owned by the Directorate General of State Assets Management.
4. Digital Forensics
Digital forensics is a technique or way of handling electronic data starting from data acquisition, processing, analysis, and reporting activities as well as electronic data storage so that the information produced can be legally accounted for. Digital forensic activities are needed to provide optimal results for supervision and law enforcement efforts.
In 2022, the development of digital forensics by DGT is focused on improving facilities and infrastructure in all Digital Forensics Implementation Units (UPFD), especially digital forensics laboratories in vertical units, as well as increasing the capacity of digital forensics human resources through training and technical guidance in preparation for the establishment of the functional position of Tax Auditor in the digital forensics sub-unit.
The development of the Digital Forensic Laboratory was initiated by DGT in 2020 as an effort to improve
Type of Tax Collection Frequency Disbursement (Rp Billion)
Reprimand Letter 1,743,519 5,598.28
Delivery of Coerce Warrant 520,448 5,213.02
Notice of Seizure 21,674 1,783.53
Bank Acoount Freeze 13,186 954.23
Auctioning confiscated goods 4,186 293.50
Prevention of cross-border escape 419 228.57
Imprisonment - -
Total 2,303,432 14,071.13
Tax Arrears Disbursement by Tax Collection, 2022
Organizational Performance 97
Overview
2022 AnnualReport
DGT use the completion aspect of the Digital Forensics Task Implementation Report (LPTFD) for digital forensics performance measurement. In 2022, UPFD in DGT issued a total of 811 Digital Forensics Task Force Letters (STFD), either in the context of conducting tax audits, preliminary investigations, investigations, or other activities that require support for digital forensics. By the end of 2022, UPFD had completed 813 LPTFDs. This number increased by 16.98 percent from the completion in 2021 of 695 LPTFD.
In addition to the completion of LPTFD, the performance of digital forensics is also measured by the utilization of electronic data resulting from digital forensics activities. Electronic data utilization is the submission of the results of electronic data processing and analysis to parties who request support from digital forensic activities, both internal and external parties. Electronic data processing involves activities to extract and recover electronic data resulting from the imaging process in the form of structured original files with the aim of facilitating further processes.
Meanwhile, electronic data analysis is an activity that interprets electronic data that has been recovered in an
informative form. The realization of the performance of the utilization of electronic data resulting from digital forensic activities in 2022 reached 98.1 percent of the target of 70 percent.
Description Head Office
Level RTO Level Total
Issuance of Digital Forensics Assignment Letters (STFD) for:
- Audit
- Preliminary Investigation - Investigation
- Request for Assistance from DJBC - Others
9 51 11 26 16
341 345 12 - -
343 378 26 26 38
STFD Cancellation 3 19 22
LPTFD Completion 118 695 813
Source: Directorate of Law Enforcement