Ar 2011 Eng Finale

Annual Report 2011
Directorate General Of Taxes

Ministry of Finance of the Republic of Indonesia
Fostering Responsibility Through Optimism

Head Office
Jl. Jenderal Gatot Subroto No. 40-42

Jakarta Selatan 12190
Tel.: (62-21) 525 0208, 525 1609, 526 2880
Fax.: (62-21) 525 1245
Annual Report 2011
Call Center/Kring Pajak: (62-21) 500200

e-mail: pengaduan@pajak.go.id
www.pajak.go.id
Annual Report 2011
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CONTENTS
Vision, Mission, and Values 5 07 Disputes Settlement 75
Remaks by the Director General 6 Tax Disputes Settlement 76

of Taxes Case Handling in Courts other than 80
Tax Court
DGT Board of Directors 10
Services, Dissemination, and
08 83
Calendar of Events 2011 16 Public Relations
Services 84
01 DGT at a Glance 19
Dissemination 89
02 Performance 25 Public Relations 90
Key Performance Indicators 26 09 DGT in International Relations 93

Tax Revenue 32 Tax Treaty Agreement and Exchange of 94
DGT Quick Wins 2011 2012 36 Tax Information
Operational Unit Achievement 37 DGT Participation in International Fora 96
Significant Events 41 Activities of Donor Countries/Institutions 97

03
Visit by Foreign Delegations 100
National Tax Census 42
Formulation and Internalization of the 44 10 Apparatus Management 103
Ministry of Finance Values Human Resources Management 104
04 Refinement of Tax Policies 47 Employee Discipline Monitoring and 112
Enforcement
The General Provisions and Tax Procedures 48
Organizational Development 114
Provisions on Income Tax 50
Risk Management 117
Provisions on VAT and Sales Tax on Luxury 51
Goods Business Process and Information
11 119
Provisions on Land and Building Tax 51 and Communication Technology
Tax Incentives 52 Business Process Refinement 120
05 Potency Exploration 55 Development of Information and 122
Communication Technology
Extensification 56
Intensification 59 12 Statistics 127
06 Law Enforcement 63
Audit 65
Transfer Pricing Audit 68
Collection 68
Investigation 70

3
2011
Annual Report
Directorate General of Taxes
Fostering
Responsibility
Through Optimism
In order to achieve the self-sufficient of the nation, the Directorate

General of Taxes (DGT) has formulated a number of strategic policy
throughout 2011. This policy was formulated specifically to strengthen
and broaden the tax base, which in turn would increase tax revenues.
Surely strategic policy is also supported by the DGT performance
improvement especially in human resources aspects. In the spirit of
optimism, DGT will never cease to foster the self-sufficient of the nation
through taxes.
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4
2011
Annual Report
Passion and optimism are our initial strategy for a better future.

5
2011
Annual Report
To be a government institution that implements a

Vision modern tax administration system that is effective,
efficient, and trusted by the public with high integrity
and professionalism.
To collect tax revenue through an effective and efficient

Mission tax administrative system based on tax law, which
enables the state to achieve a self-sufficient funding of
state budget.
Integrity
Values Think, talk, behave, and act properly and righteously
according to code of ethics and moral principles.
Professionalism
Work thoroughly and accurately based on the best
competencies with full responsibility and high commitment.
Synergy
Build and ensure productive internal cooperation and
harmonious partnership with stakeholders, to produce
useful and high quality work.
Service
Provide services wholeheartedly, transparently, fast,
accurately, and safely to meet stakeholders satisfaction.
Excellence
Perform continuous improvement in every aspect to
become and to give the best.

6
2011 DGT Performance Significant Refinement of Potency Law
Annual Report at a Glance 2011 Events Tax Policies Exploration Enforcement
Remarks by
the Director General of Taxes
A. Fuad In 2011, DGT launched National Tax Census program to explore tax potency
Rahmany
through data collection of tax objects. National Tax Census can also be seen
Director General as an effort to enforce justice in taxation where all tax subjects was once again
of Taxes reminded to fulfill their tax obligations according to the applicable laws and
regulations.

7
Disputes
Services, DGT in Apparatus Business Processes 2011
Dissemination, and International Resources & Information and Statistics Annual Report
Settlement
Public Relations Relations Management Communication Technology Directorate General of Taxes
Assalamualaikum Wr. Wb.

Distinguished stakeholders,
Praise and thanks to Allah SWT, the Almighty, who has granted us with many blessings.
It is a pleasure for Directorate General of Taxes (DGT) to present the summary of our
performance to our stakeholders through this Annual Report. It is an honor for me to be
appointed as the leader of this institution so that I can personally be involved in the history
of DGT.
In 2011, DGT managed to collect Rp742.74 trillion in tax revenue, including Oil and Gas
Income Tax, or 97.26% of the targeted state revenue as stated in 2011 revised State Budget.
This shows a 19.76% increase from Rp620.20 trillion1 tax revenue in 2010. Therefore, I
would like to express my highest appreciation to the public and our stakeholders for your
continuous support, and to all of DGT employees for their dedication and hard work.
Significant events of 2011 include the launching of National Tax Census program and the
launching of the Ministry of Finance shared values which will served as the foundations for
DGT in the future in its effort to collect tax revenue. National Tax Census is a program to
explore tax potency through data collection of tax objects. National Tax Census can also
be seen as an effort to uphold justice and equality in the area of taxation by reminding
all tax subjects to fulfill their obligations according to the prevailing laws and regulations.
Meanwhile, the establishment of shared values at the ministry level is mandatory to enhance
synergy between echelon I units within the Ministry of Finance. This synergy is important
since duties and functions of echelon I unit at the Ministry of Finance often interrelate with
one another causing the success of one echelon I unit is dependent of other echelon I
unit support. By having the same shared values in its entire echelon I units, the Ministry of
Finance will be able to better perform its duty in the area of state finance and asset.
In tax policy area, several important notes for 2011 include the following: the release of
Government Regulation Number 74 Year 2011 regarding Procedures for Exercising Tax
Rights and Fulfillment of Tax Obligations, as the implementing provision of Law Number
16 Year 2009 regarding General Provisions and Tax Procedures. The formulation and
discussions of this regulation involved many parties and produce many suggestions and
feedbacks, and therefore is expected to meet publics expectation of a more just, simpler,
and transparent tax administration. Furthermore, DGT also released a provision regarding
tax holiday in order to boost domestic industrial growth. It was regulated under the Minister
of Finance Regulation Number 130/PMK.011/2011 regarding Exemption and/or Reduction
of Corporate Income Tax, and several other regulations of the Director General of Taxes as
its implementing provisions.
DGT fully realize that the management of tax documents and data which includes
data receipt, processing, and utilization is not optimal yet. The weak supervision in the
management of tax data and documents makes the data cannot be utilized optimally and
cannot support the supervision of taxpayers compliance. To improve this condition, in
1
The tax revenue figure does not take into account Acquisition Duty of Right on Land and Building revenue, with a
consideration that starting from 2011 the Acquisition Duty of Right on Land and Building would be included as local
tax.

8
2011 DGT carried out another organization expansion that aimed at eliminating problems
in tax data and documents handling. The output of organization expansion in 2011 was
the establishment of External Data Processing Office, and Taxation Data and Document
Processing Office in Makassar, in addition to the expansion of Taxation Data and Document
Processing Center working area coverage.
Human Resources (HR) Development has become the focus for DGT. In 2011, DGT has
finished the formulation of 2011 2018 HR Management Strategic Map and HR Management
Blue Print that will be used as a reference in designing, formulating, implementing, and
evaluating a comprehensive and sustainable HR management development.
DGT always try to create conducive working environment, which provides unlimited
growth opportunities for all its employees, while on the other hand, improve employee
supervision and close all gaps for any frauds and violation of codes of ethics. In 2011,
these were marked with the implementation of best employee recognition program, and
the implementation of whistle-blowing system. DGTs commitment to good governance
will never fade away. Therefore, system and procedure improvements are being continued
in 2011 to ensure that all activities are performed according to regulations, and are
measurable, standardized, and can be held accountable.
Throughout 2011, DGT actively engaged in cooperation with various tax and non-tax
institutions, both domestic and international. At the domestic level, the cooperation include,
among others, with the Indonesian Financial Transaction Reports and Analysis Center
(INTRAC) in the area of law enforcement, with the Indonesian Accountant Association
(IAI) in the area of tax information dissemination and education, and with the Government
Goods/Services Procurement Policy Institution (LKPP) for the purpose of data exchange.
DGT active participation in international cooperation during 2011 was, among others,
by participating in the Meeting of the Advisory Group for Cooperation with Non-
OECD Economic in Zambia, the 5th International Financial Reporting Standards (IFRS)
Regional Policy Forum & International Seminar in Bali, ATAIC 8th Technical Conference
in Saudi Arabia, the 41st SGATAR Meeting in Malaysia, and the 4th International Tax
Dialogue Global Conference on Tax and Inequality in India. Throughout 2011, DGT also
organized negotiation/renegotiation of tax treaty with several countries, i.e. Lao, India, the
Netherlands, Australia, South Korea, Malaysia, and Germany. Furthermore, in 2011 DGT
was also involved in the signing of Tax Information Exchange Agreement (TIEA) with several
countries/jurisdictions.
DGT participation in and contribution to various international fora, meetings, and

agreements is expected to be beneficial for Indonesia, especially in the finance area. One
of the benefits was the collection of the latest information on various best provisions,
practices, and experiences in tax administration from all over the world.

9
Disputes
Settlement
Excellent achievement was proudly highlighted by DGT in 2011, namely various

recognitions received by Kring Pajak 500200 in contact center competitions both nationally
and internationally. Kring Pajak 500200 is the pioneer contact center for government sector
in Indonesia. The existence and achievements of this contact center are DGTs real efforts
to improve its services based on information and communication technology.
The tax revenue targets are increasing sharply each year. However, I am convinced that
DGT has always had the opportunities to achieve the targets. The tax potency exploration,
aimed to increase the number of new taxpayers and to increase the tax revenue from the
existing 22 million taxpayers, is DGT continuous effort in achieving tax revenue target.
The tax potency exploration is performed by using various approaches and methods and
is supported with effective dissemination of tax information and education, and reliable
information technology infrastructure.
The biggest challenge for DGT at present and in the future is to rebuild DGTs image
that was deteriorated by various cases of power abuse which were alleged to DGT
personnel. Improvement of tax apparatus integrity and professionalism is a must in order
to regain public trust. Thus, the mandate of collecting tax revenue as entrusted to DGT
could be performed with great optimism in hope that self-sufficient funding of the national
development can be achieved.
Wassalamualaikum Wr. Wb.
A. Fuad Rahmany
Director General of Taxes

10
DGT
Board of Directors
Director General of Taxes, Secretary of the Directorate General of Taxes,
Directors, and Senior Advisors Profiles
Herry Sumardjito Awan Nurmawan Nuh Achmad Sjarifuddin Alsah

Secretary of the Directorate General Director of Taxation Regulations I Director of Taxation Regulations II
of Taxes
Herry Sumardjito has become the Secretary Awan Nurmawan Nuh has been the Director Achmad Sjarifuddin Alsah has been the
of the Directorate General of Taxes since of Taxation Regulations I since 31 October Director of Taxation Regulations II since
25 February 2011. He accomplished 2011. He received a Bachelors degree in 28 April 2009. He is an alumnus of the
a Bachelors Degree in Economics Economics majoring in Accounting from Institute of Financial Studies of 1980, an
majoring in Accounting from Gadjah Mada Gadjah Mada University in 1992 and a alumnus of the University of Illinois of USA
University in 1980, a Masters degree Masters degree in Business Taxation from in 1986, and an alumnus of the University
in Administration from the University of the University of Southern California of USA of Bloomington of USA in 1992 as a Doctor
Indonesia in 2002, and a Doctors degree in 1997. of Philosophy in Management.
in Business Management from Bogor
Agricultural University in 2011.

11
Disputes
Settlement
A. Fuad Rahmany
Director General of Taxes
A. Fuad Rahmany has been assigned the position as the Director

General of Taxes since 21 January 2011. He obtained a Bachelors
degree in Economics from the University of Indonesia in 1981, a Master
of Arts degree in Economics from Duke University of USA in 1987, and a
Doctors degree in Economics from Vanderbilt University of USA in 1997.
Dadang Suwarna Agus Hudiyono Hartoyo

Director of Audit and Collection Director of Intelligence and Investigation Director of Extensification and Appraisal
Dadang Suwarna has occupied the Agus Hudiyono has been the Director of Hartoyo has been the Director of
position as the Director of Audit and Intelligence and Investigation since 25 Extensification and Appraisal since 16
Collection since 25 February 2011. He February 2011. He is an alumnus of the June 2008. He gained a Bachelors degree
graduated from Diploma IV Program of Faculty of Economics of Gadjah Mada in Economics majoring in Management
Finance specializing in Accounting of the University of 1980. from Mulawarman University in 1982 and a
State College of Accounting in 1991. Masters degree in Business Property from
the University of South Australia in 1992.

12
Catur Rini Widosari Amri Zaman

Director of Objection and Appeal Director of Potency, Compliance, and Revenue
Catur Rini Widosari has become the Director of Objection and Amri Zaman has been assigned the position of Director of Potency,
Appeal since 6 April 2010. She obtained a Bachelors degree in Compliance, and Revenue since 31 October 2011. He received
Economics from Sriwijaya University Palembang in 1989, and a Bachelors degree in Economics majoring in Accounting from
a Masters degree in Business Taxation from the University of Padjadjaran University in 1978 and a Masters degree in Accounting
Southern California of USA in 1998. from Case Western Reserve University of USA in 1989.
Dedi Rudaedi Yoyok Satiotomo

Director of Counseling, Services, and Public Relations Director of Tax Information Technology
Dedi Rudaedi was posted as the Director of Counseling, Services, Yoyok Satiotomo has become the Director of Tax Information
and Public Relations since 31 October 2011. He graduated from Technology since 6 April 2010. He accomplished a Bachelors
Diploma IV Program of Finance specializing in Accounting of the degree in Economics majoring in Management from
State College of Accounting in 1982. In 1986, he finished his study Krisnadwipayana University in 1986 and a Master of Arts degree
at the Hartford University of USA with a Master of Science degree in Business and Commerce from Keio University of Japan in 1999.
in Professional Accounting.

13
Disputes
Settlement
Bambang Tri Muljanto Harry Gumelar

Director of Internal Compliance and Apparatus Transformation Director of Information and Communication Technology
Transformation
Bambang Tri Muljanto has been appointed the Director of Internal Harry Gumelar has become the Director of Information and
Compliance and Apparatus Transformation since 25 February Communication Technology Transformation since 21 June 2011.
2011. He acquired his Bachelor of Law from the University of He gained his Bachelor of Engineering from Bandung Institute of
Indonesia in 1986 and Master of Business Administration from Technology in 1990 and Master of Information System from Queen
Saint Louis University of USA in 1992. Mary University of London, England in 1997.
Wahju Karya Tumakaka Arfan

Director of Transformation of Business Process Senior Advisor of Tax Extensification and Intensification
Wahju Karya Tumakaka has been appointed the Director of Arfan has become the Senior Advisor for Tax Extensification and
Transformation of Business Process since 25 February 2011. He Intensification since 31 October 2011. He graduated from Diploma
graduated from Diploma IV Program of Finance specializing in IV Program of Finance specializing in Accounting of the State
Accounting of the State College of Accounting in 1987 and from College of Accounting in 1991. Furthermore, in 1996 he obtained
Master of Public Administration Program of Harvard University of his Master of Arts in Economics from Saint Marys University,
USA in 1995. Halifax in Canada.

14
Euis Fatimah Mekar Satria Utama

Senior Advisor of Tax Services Senior Advisor of Human Resources Development
Euis Fatimah has served as the Senior Advisor for Tax Services Mekar Satria Utama has been appointed as the Senior Advisor
since 31 October 2011. She completed her undergraduate study for Human Resources Development since 31 October 2011. He
at School of Administration of State Administration Institution of accomplished his Bachelors degree in Economics in 1990 from
Bandung in 1988. In 1999, she finished her Graduate Program Padjadjaran University in Bandung, and his Master of Professional
in Tax Administration at the University of Indonesia in Jakarta, Accounting degree from the University of Texas, Austin of USA in
and acquired her Doctors degree in Social Study in 2002 from 1999.
Padjadjaran University in Bandung.
Poltak Maruli John Liberty Hutagaol

Senior Advisor of Tax Supervision and Law Enforcement
Poltak Maruli John Liberty Hutagaol has become Senior Advisor

for Tax Supervision and Law Enforcement since 31 October
2011. He received his Bachelors degree in Economics majoring
in Accounting from Brawijaya University of Malang in 1988, his
Master of Arts degree in Economics in 1994, and his Master of
Economics degree by Research in 1995 from Macquarie University
of Australia. Furthermore, his Doctors degree was acquired from
Padjadjaran University of Bandung in 2004.

15
Disputes
Settlement
List of Heads of Regional Tax Offices and

Head of Taxation Data and Document Processing Center
No. Name Title
1. Sigit Priadi Pramudito Head of Large Taxpayer Regional Tax Office

2. Riza Noor Karim Head of Jakarta Special Regional Tax Office
3. Mukhtar Head of Nanggroe Aceh Darussalam Regional Tax Office
4. Estu Budiarto Head of North Sumatera I Regional Tax Office
5. Harta Indra Tarigan Head of North Sumatera II Regional Tax Office
6. Nirwan Tjipto Head of Riau and Riau Islands Regional Tax Office
7. Peni Hirjanto Head of West Sumatera Barat and Jambi Regional Tax Office
8. Kismantoro Petrus Head of South Sumatera and Bangka Belitung Islands Regional Tax Office
9. Rizal Admeidy Head of Bengkulu and Lampung Regional Tax Office
10. Djonifar Abdul Fatah Head of Central Jakarta Regional Tax Office
11. Ichwan Fachruddin Head of West Jakarta Regional Tax Office
12. Pandu Bastari Head of South Jakarta Regional Tax Office
13. Hario Damar Head of East Jakarta Regional Tax Office
14. Otto Endy Panjaitan Head of North Jakarta Regional Tax Office
15. Muhammad Haniv Head of Banten Regional Tax Office
16. Adjat Djatnika Head of West Java I Regional Tax Office
17. Angin Prayitno Aji Head of West Java II Regional Tax Office
18. Sakli Anggoro Head of Central Java I Regional Tax Office
19. Bambang Is Sutopo Head of Central Java II Regional Tax Office
20. Dicky Hertanto Head of Special Region of Yogyakarta Regional Tax Office
21. Suharno Head of East Java I Regional Tax Office
22. Erwin Silitonga Head of East Java II Regional Tax Office
23. Ken Dwijugiasteadi Head of East Java III Regional Tax Office
24. Winarto Suhendro Head of West Kalimantan Regional Tax Office
25. Eddy Marlan Head of South and Central Kalimantan Regional Tax Office
26. Mohammad Isnaeni Head of East Kalimantan Regional Tax Office
27. Eling Budi Prayitno Head of South, West, and South East Sulawesi Regional Tax Office
28. Arfan Interim Head of North and Central Sulawesi, Gorontalo, and North Maluku Regional Tax Office
29. Zulfikar Thahar Head of Bali Regional Tax Office
30. Pontas Pane Head of Nusa Tenggara Regional Tax Office
31. Singal Sihombing Head of Papua and Maluku Regional Tax Office
32. Muh. Ismiransyah M. Zain Head of Taxation Data and Document Processing Center

16
Calendar of Events
of 2011
JANUARY
01 March
03 MAY
05
28-29
Indonesia and the Netherlands Tax
Treaty Negotiation in relation with the
Amendment of Protocol, conducted in
London.
17
President of the Republic of Indonesia,
18
Filing of 2010 Annual Income Tax Return
JUNE
06
Susilo Bambang Yudhoyono, issued 12 for Individual by the President of the 22
instructions related to the law enforcement Republic of Indonesia, Susilo Bambang Signing of Indonesia and Isle of Man,
process in the case of Gayus Tambunan, Yudhoyono; the Vice President of the Indonesia and Bermuda TIEAs, conducted
after the limited cabinet meeting at Republic of Indonesia, Boediono; and the in London.
08
the Presidents Office. The instructions members of Indonesia Cabinet (Indonesia
were released to be implemented by Bersatu II) at DGT Head Office, Jakarta. AUGUST
law enforcer and relevant government
elements to settle the case.
APRIL
04
10
21 The Minister of Finance, the Governor of
The Minister of Finance inaugurated Indonesian Central Bank, and Head of the
A. Fuad Rahmany as the Director General Central Agency of Statistics signed the
16 Memorandum of Understanding on Data
of Taxes in replacement of Mochamad
Signing of Performance Contract Exchange related to Export and Import
Tjiptardjo.
(Kemenkeu-Two) between the Director
02
Activities at the Central Bank Building,
FEBRUARY General of Taxes and the entire echelon II Jakarta. The scope of data included
officials of DGT, which held at DGT Head in this MoU consists of export-import
9-10 Office, Jakarta. data, Receipt of Export Proceeds, and
The second round of Indonesia and Lao data of exporters importers Taxpayer
27
Tax Treaty Negotiation, held in Bali. Identification Numbers, and processed
Signing of Tax Information Exchange
data of customs.
Agreement (TIEA) between
Indonesia-Jersey and Indonesia-Guernsey,
held in Guernsey.
SEPTEMBER
09
7-9
28-29 Negotiation on the possibility for Indonesia
The second round of Indonesia and India and Australia Tax Treaty renegotiation
25 Tax Treaty Renegotiation, held in New (Informal Meeting), held in Jakarta.
Signing of Performance Contract Delhi, India.
(Kemenkeu-One) between the Minister of 28-30
Finance and the entire echelon I officials Renegotiation of Indonesia and South
which held at the Ministry of Finance, Korea Tax Treaty, held in Seoul, South
Jakarta. Korea.

17
Disputes
Settlement
11
Held at the Office of Governments Goods
and Services Procurement Agency
(Lembaga Kebijakan Pengadaan Barang/
Jasa Pemerintah/LKPP), Jakarta, the
Director General of Taxes and the Head
30 19 of LKPP signed the Mutual Agreement on
The Minister of Finance, Agus D.W. Taking place at the Headquarters of the Exchange of Data and Improvement
Martowardojo, accompanied by the Indonesian Financial Transaction Reports of Technical Capacity between LKPP and
Governor of Jakarta Province, Fauzi and Analysis Center (INTRAC), Jakarta, DGT.
12
Bowo, and the Director General of the Director General of Taxes and the
Taxes, launched the National Tax Census Head of INTRAC signed the Mutual DECEMBER
program at JITEC Mangga Dua Square, Agreement on the Cooperation for the
Jakarta. Prevention and Eradication of Money
Laundering Criminal Act and Criminal Acts
OCTOBER
10 in the Area of Taxation.
5 20
Taking place at the Ministry of Finance, Signing of Indonesia and Malaysia Tax
the Minister of Finance launched the Treaty renegotiation related to the Article 6
on Exchange of Information, conducted in Commemoration of World Anti Corruption
whistle-blowing system within the Ministry
Lombok. Day at DGT Head Office, Jakarta.
of Finance of the Republic of Indonesia.
Two main agendas of the event were
The system, named Wise, is applied
the provision of rewards to excellent
and used as a breach reporting tools, so
employees and launching of book entitled
that the reporting party can monitor the
Berbagi Kisah dan Harapan-Berkah
progress of the report.
(Sharing Stories and Hope) Part 2.
12-16
The first round of Indonesia and Germany
22 Tax Treaty renegotiation, held in Jakarta.
Kick-Off of Declaration of the Ministry of
Finance Values. Held at DGT Head Office,
this event was attended by the Minister
of Finance and 600 other participants,
which consist of echelon I officials and
18 employees within the Ministry of Finance.
The Supreme Court rejected the request
for judicial review by the Indonesia
Petroleum Association (IPA) against Article
38 letter b, Article 30, and part of Article
NOVEMBER
11 23
Conducted at Balai Kartini, Jakarta, the
12 of Government Regulation Number Director General of Taxes and the Head
79 Year 2010 on Refundable Operational of Indonesian Accountant Association
Expenditure and Treatment of Income (Ikatan Akuntan Indonesia/IAI) signed
Tax in Natural Oil and Gas Upstream a Memorandum of Understanding
Businesses. on the cooperation in dissemination,
education, and improvement of the role
of Accountant Participation in Building
Community Awareness and Obedience in
the Taxation Area.

18
2011
Annual Report
Our deep learning and understanding of internal resources and
external condition lead us in taking the responsibility.

19
2011
Annual Report
DGT
at a Glance
01
DGT, consisting of 572 operational offices and more
than 32,000 employees, is the largest organization
within the Ministry of Finance. Those resources can
be an opportunity as well as a challenge for DGT in
achieving its vision and mission.

20
Organization
DGT is an echelon I unit under the Ministry of Finance. According to the Presidential
Ordinance Number 24 Year 2010 regarding the Position, Duties, and Functions of the State
Ministry, and Organizational Structure, Duties, and Functions of Echelon I of the Ministry of
Finance, and the Regulation of Minister of Finance Number 184/PMK.01/2010 regarding
Organization and Work Procedures of the Ministry of Finance, the DGTs main task is to
formulate and implement technical policies and standardization in the area of taxation.
In undertaking those duties, DGT performs the following functions:
a. preparing policy formulation of the Ministry of Finance in taxation area;

b. implementing tax policies;
c. preparing norms, standards, procedures, and criteria in taxation area;
d. providing technical guidance and evaluation in taxation area; and
e. performing tax administration.

21
Disputes
Settlement
DGT Organizational Structure
Directorate
General of
Taxes
Secretariat of Senior Advisors

the Directorate Senior Advisor of Tax Service
General Senior Advisor of Tax Extensification and Intensification
Senior Advisor of Tax Supervision and Law Enforcement
Senior Advisor of Human Resources Development
Directorate Regional Tax Office Technical

Directorate of Taxation Regulations I Large Taxpayer Regional Tax Office Implementing Unit
Directorate of Taxation Regulations II Jakarta Special Regional Tax Office Taxation Data
Directorate of Audit and Collection Nanggroe Aceh Darussalam Regional Tax Office and Document
Directorate of Intelligence and North Sumatera I Regional Tax Office Processing Center
Investigation North Sumatera II Regional Tax Office Taxation Data
Directorate of Extensification and Riau and Riau Islands Regional Tax Office and Document
Appraisal West Sumatera and Jambi Regional Tax Office Processing Office
Directorate of Objection and Appeal South Sumatera and Bangka Belitung Islands External Data
Directorate of Potency, Compliance, Regional Tax Office Processing Office
and Revenue Bengkulu and Lampung Regional Tax Office
Directorate of Counselling, Service, Central Jakarta Regional Tax Office
and Public Relations West Jakarta Regional Tax Office
Directorate of Tax Information South Jakarta Regional Tax Office
Technology East Jakarta Regional Tax Office
Directorate of Internal Compliance North Jakarta Regional Tax Office
and Apparatus Transformation Banten Regional Tax Office
Directorate of Information and West Java I Regional Tax Office
Communication Technology West Java II Regional Tax Office
Transformation Central Java I Regional Tax Office
Directorate of Business Process Central Java II Regional Tax Office
Transformation Special Region of Yogyakarta Regional Tax Office
East Java I Regional Tax Office
East Java II Regional Tax Office
East Java III Regional Tax Office
West Kalimantan Regional Tax Office
South and Central Kalimantan Regional Tax Office
East Kalimantan Regional Tax Office
South, West, and South East Sulawesi Regional
Tax Office
North and Central Sulawesi , Gorontalo, and
North Maluku Regional Tax Office
The DGT organization at the head office
Bali Regional Tax Office
consists of the Secretariat of the Directorate
Nusa Tenggara Regional Tax Office
General, Directorates, and Senior Advisors.
Papua and Maluku Regional Tax Office
In general, the head office carries out the
back office function, namely the policy and
analysis maker, and serves as technical
support and facilitator, such as personnel, Tax Office
financial, and equipment issues. The
operational function, such as audit and
objection, is performed very limitedly. Tax Service, Counselling and Consultation
Offices

22
Main Tasks of Units Within DGT Head Office
Position Task
Secretariat of the Directorate General To coordinate the task engagement and to guide as well as provide
administrative supports to all units within DGT.
Directorate of Taxation Regulations I To formulate and to implement policies and technical standardization
in General Provisions and Tax Procedures, Tax Collection with Coerce
Warrant, Value Added Tax and Sales Tax on Luxury Goods, Other Indirect
Taxes, Land and Building Tax, and Acquisition Duty of Right on Land and
Building.
Directorate of Taxation Regulations II To formulate and to implement policies and technical standardization in
Income Tax regulations, tax treaty and international cooperation, legal
assistance, and harmonization of tax regulation.
Directorate of Audit and Collection To formulate and to implement policies and technical standardization in
tax audit and collection.
Directorate of Intelligence and To formulate and to implement policies and technical standardization in
Investigation intelligence and tax investigation.
Directorate of Extensification and To formulate and to implement policies and technical standardization in
Appraisal tax extensification and appraisal.
Directorate of Objection and Appeal To formulate and to implement policies and technical standardization in
objection and appeal.
Directorate of Potency, Compliance, To formulate and to implement policies and technical standardization in
and Revenue potency, compliance, and tax revenue.
Directorate of Counseling, Service, To formulate and to implement policies and technical standardization in
and Public Relation tax counseling, service, and public relation.
Directorate of Tax Information To formulate and to implement policies and technical standardization in
Technology tax information technology.
Directorate of Internal Compliance and To formulate and to implement policies and technical standardization in
Apparatus Transformation internal compliance and apparatus transformation.
Directorate of Information and To formulate and to implement policies and technical standardization in
Communication Technology information and communication technology transformation.
Transformation
Directorate of Business Process To formulate and to implement policies and technical standardization in
Transformation business process transformation.
Senior Advisor of Tax Extensification To review and to study issues in tax extensification and intensification and
and Intensification provide conception solution rationing
Senior Advisor of Tax Service To review and to study issues in tax service and to provide conception
solution rationing.
Senior Advisor of Human Resources To review and to study issues in human resources development and to
Development provide conception solution rationing.
Senior Advisor of Tax Supervision and To review and to study issues in tax supervision and law enforcement and
Law Enforcement to provide conception solution rationing.

23
Disputes
Settlement
To undertake operational and technical duties in the regions, operational units have been DGT Operational Units in 2011
established within the DGT, namely Regional Tax Offices (Kantor Wilayah), Tax Offices
(Kantor Pelayanan Pajak/KPP), and Tax Service, Counseling and Consultation Offices
(Kantor Pelayanan, Penyuluhan, dan Konsultasi Perpajakan/KP2KP). Type Total
Regional Tax Office 31

Regional Tax Office performs the tasks of coordinating, controlling, analyzing, and
Large Taxpayer Office 4
evaluating tax offices operations, and elucidation of the head office policies. The types of
Medium Taxpayer Office 28
Regional Tax Office are:
Small Taxpayer Office 299
a. Large Taxpayer Regional Tax Office and Jakarta Special Regional Tax Office Tax Service, Counseling &
located in Jakarta; and Consultation Office 207
b. Other Regional Tax Office consists of 29 Regional Tax Offices located throughout Technical Implementing Unit 3
Indonesia. Total 572
Tax Offices perform the functions of delivering services, counseling, and monitoring of
taxpayers. Based on the taxpayer segmentations, Tax Offices can be differentiated into:
a. Large Taxpayer Office (LTO), administering national large corporate taxpayers,

state-owned enterprises, and high wealth individuals;
b. Medium Taxpayer Office (MTO), administering large corporate taxpayers,
foreign investment companies; permanent establishment and expatriates, and
public listed companies in its region; and
c. Small Taxpayer Office (STO), serving local individual and corporate taxpayers.
Tax Service, Counseling and Consultation Office is established to undertake the taxation
service, counseling, and consultation duties to taxpayers/community residing in remote
areas unreached by Tax Offices.
There are also Technical Implementing Units (Unit Pelaksana Teknis/UPT), to perform
technical operation and technical support for data processing. These units consist of:
a. Taxation Data and Document Processing Center, located in Jakarta and has
main tasks of receiving, scanning, recording, and storing tax documents using
information technology;
b. Taxation Data and Document Processing Office, located in Makassar and has
main tasks of receiving, scanning, recording, and storing tax documents, and
also transferring tax data by using information technology;
c. External Data Processing Office, located in Jakarta and has main tasks of
receiving, scanning, and storing tax documents, and also transferring tax related
data provided by government institutions, foundations, associations, and other
parties, using information technology.

24
2011
Annual Report
Our new paradigm is to look at the mandated responsibilities
not as hardship, but as an honor.

25
2011
Annual Report
Performance
2011
02
Realization of net tax revenue including Oil and
Gas Income Tax in 2011 was Rp742.74 trillion, or
increased by 19.76% compared to the realization of
tax revenue in 2010. On the other hand, realization
of net tax revenue excluding Oil and Gas Income
Tax 2011 was Rp669.65 trillion, or increased by
19.30% compared to the realization of tax revenue
in 2010.

26
A Key Since 2007, DGT has undertaken performance management by applying the Balance
Performance Scorecard (BSC) concept and method. BSC is a tool to measure performance in order to
Indicator help an organization interpret its visions, missions, and strategies into actions, by utilizing
financial and non-financial indicators, which are interconnected in a cause-and-effect
relation.
DGT continuously conducts its performance management by refining over the strategic
objectives and Key Performance Indicators (KPI) to accommodate organizational needs
and dynamics as well as to harmonize with the Strategic Plan of the Ministry of Finance.

27
Disputes
Settlement
DGTs 2011 strategic map is a result of refinement of the Ministry of Finances Strategic
Map, Strategic Objectives, and Key Performance Indicators for the year 2011. The 2011
strategic map incorporates 15 strategic targets and 27 KPIs, which have been decided to
become a Performance Contract between the Director General of Taxes and the Minister
of Finance.
DGT Strategic Map 2011

Stakeholder
Perspective
Public Accomplishing
Parliament PJ-1 PJ-2 society awareness
Government Optimum tax revenue High public trust of tax
Perspective
PJ-3
Customer
High taxpayers PJ-4

Taxpayers satisfaction level of tax High level of taxpayers
services compliance
Policy Formulating SErvice SUPERVISION & LAW ENFORCEMENT

Internal Process Perspective
PJ-5 PJ-8
PJ-6 Improvement of PJ-10
Improvement of
Service quality tax potency exploration Optimalization of
effectiveness in the
improvement based on mapping, collection
formulation and refinement
of tax regulations profiling, and benchmarking
PJ-7
Improvement of PJ-11
PJ-9
effectiveness of Improvement of
Improvement of audit
socialization and public investigation effectiveness
effectiveness
relations
Learning & Growth
INFORMATION &
HUMAN RESOURCES ORGANIZATION BUDGETING
Perspective
COMMUNICATION TECHNOLOGY
PJ-14
PJ-12 PJ-13 PJ-15
Realization of integrated
High-level Reliable organization Optimum budget
information communication
competency building development management
technology

28
Achievements of DGT
KPI-Performance Contract 2011
No. KPI Target Realization
Stakeholder Perspective
1. Percentage of tax revenue realization growth (excluding Oil and Gas Income Tax) 22.67% 19.30%
2. Total tax revenue (including Oil and Gas Income Tax) 100.00% 97.26%
3. Public trust level index based on survey result 70.00% 82.00%
4. Anti-Corruption Initiative Perception Index 8.18 N/A
Customer Perspective
5. Service Users Satisfaction Index 3.90 3.79

6. Percentage of total registered individual taxpayers against the number of 31.00% 32.39%
households
7. Percentage of Annual Income Tax Return Filing 62.50% 52.74%
Internal Process Perspective
8. Percentage of proposals completion for the drafting and refinement of the 100.00% 110.00%
Government Regulation and Regulation of the Minister of Finance
9. Percentage of proposals completion for the drafting and refinement of the 100.00% 119.05%
Regulation of Director General of Taxes
10. Percentage average of the number of complaining taxpayers 0.100% 0.00542%
11. Percentage average of excellence service commitment 100.00% 95.29%
12. Education and communication effectiveness level 70 61.3
13. Percentage of tax information dissemination and public relation realization 100.00% 100.49%
14. Percentage of mapping formulation 100.00% 100.00%
15. Percentage of taxpayers profiling 100.00% 98.73%
16. Percentage of sectoral/sub-sectoral benchmarking formulation 100.00% 110.00%
17. Percentage of audit completion 75.00% 80.41%
18. Percentage of tax arrears collection 20.00% 37.70%
19. Percentage of investigation findings completely declared by the Attorneys 40.00% 48.00%
Office (P-21 status)
Learning and Growth Perspective
20. Percentage of officials who have met the job competency standards 80.00% 78.96%
21. Percentage of employees training hours against working hours 1.72% 2.07%
22. Percentage of the number of employees charged with severe or moderate 0.272% 0.230%
disciplinary sanctions
23. Percentage of completion on organizational refinement 100.00% 100.00%
24. Percentage of SOP finalization against SOPs that need to be renewed/formulated 100.00% 134.81%
25. Percentage average of Risk Owners Units applying risk management 60.00% 100.00%
26. Percentage of completion of information system module in relation with DGTs 100.00% 100.00%
strategic plans
27. Percentage of Budget (DIPA) absorption 80.00% 80.19%

29
Disputes
Settlement
The explanations of the above table are as follow.
1. In 2011, only 85.13% of targeted revenue could be accomplished, this is due to:
a. Revenue growth of non-oil and gas income tax fell to 20.07% from the expected
of 23%. Income Tax Article 25/29 on corporate taxpayers only reached 17.70%
and 11.99% for individual taxpayers. Moreover, there was a significant dropped for
Income Tax Article 22 at 4.41%.
b. Revenue growth of VAT and Sales Tax on Luxury Goods was only 20.47% from
2011 growth target of 29.42% due to low growth of Domestic VAT at 17.41%.
2. Total tax revenue target for 2011 was not attained, due to the following causes:
a. Revenue realization of Income Tax Article 22 on Import reached the amount of
Rp28.29 trillion or 90.80% of the plan. One of the factors for this failure was the
significant increase of requests for Certificate of Exemption for Income Tax Article
22 on import of capital goods. Based on the data from the Statistics Indonesia,
import of capital goods (machinery category) to Indonesia went up significantly by
US$24.68 billion (the Statistics Indonesia, 2011).
b. Domestic VAT revenue realization reached Rp157.18 trillion or 82.26% of the target.
The revenue did not reach the target due to, among others, the low absorption
of 2011 budget, the high increment of tax refund by 21.31% from Rp26,594.10
billion in 2010 to Rp32,262.07 billion in 2011, and the increasing growth of export
by 29.05% from US$157.78 billion to US$203.62 billion (the Statistics Indonesia,
2011).
3. Survey on public trust was carried out by the DGT Outbound Call Center. Out of
681 respondents, 82% expressed their trust in DGTs integrity; this shows that the
achievement of KPI on public trust reached 117.14% from targeted 70%.
4. In 2011, the Corruption Eradication Commission (Komisi Pemberantasan Korupsi/
KPK) conducted survey on Anti-Corruption Initiatives Assessment (Penilaian Inisiatif
Anti Korupsi/PIAK) to government institutions with 2010 PIAK score below 6.00. KPK
did not undertake PIAK survey to DGT because DGT received the highest PIAK score
of 8.18.
5. Bogor Agricultural University (Institut Pertanian Bogor/IPB) carried out a customer
satisfaction survey on the quality of DGT service elements with 684 respondents.
Elements included in this survey were, among others, service completion time,
information on service requirement, compliance to procedure, access to service offices,
and personnel attitude and capability. The survey result on customer satisfaction index
was 3.79 or 97.18% from 3.90 targets. The survey result based on satisfaction level
to DGTs services was 62.85% expressing satisifaction, 32.75% expressing sufficient
satisifaction, and 4.41% expressing dissatisfaction.
6. Percentage of registered individual taxpayers against the number of households in 2011
was 32.39%, exceeding the target given is 31%. The number of individual taxpayers
at the end of 2011 is 19,881,684, of the number of households of 61,379,510. This
attainment was supported by National Tax Census program, which managed to add
many new registered taxpayers.
7. The number of Annual Income Tax Returns filed in 2011 increased by 1,130,317
compared to 2010. However, the compliance ratio of Annual Income Tax Return filing
in 2011 was lower than in 2010. This is due to:

30
a. there are many taxpayers who registered to obtain Taxpayer Identification Number
only to acquired free exit tax without fulfilling their tax obligations;
b. there are significant increase of retired taxpayers who do not comprehend their
obligations to annually submit their Tax Returns; and
c. there are significant increase in the number of registered taxpayers obliged to
submit Annual Income Tax Return, however, they do not fulfill their tax obligation.
8. Until the end of 2011, the number of Government Regulation Draft and Regulation of
Minister of Finance Draft that has been finalized was 33 of the total 30 planned. This
shows that KPI on this indicators was 110%.
9. The number of Regulation of Director General of Taxes that has been finalized was 25
from the total target of 21. This shows that the achievement of KPI on this indicators
was 119.05%.
10. Based on Tax Complaint Information System (Sistem Informasi Pengaduan Pajak/
SIPP), taxpayers that have submitted complaints up to 31 December 2011 was 1,036
taxpayers (0.00542%) from the maximum target of 19,000 taxpayers (0.1%) out of 19
million registered taxpayers at the beginning of 2011.
11. Throughout 2011, there were 2,099,770 applications for quick wins service. Of that
number, 2,073,778 applications could be completed in time, therefore the achievement
was 95.29%. The target could not be achieved due to external factors beyond DGT
control.
12. For KPI on education and communication effectiveness, DGT has undertaken public
surveys at all Regional Tax Offices. Of the targeted index of 70, the survey result was
61.3 or 87.57%. This because respondents tend to be intuitive and not objective and it
was quite difficult to quantify the effectiveness of the counselling. The other cause was
internal factors, such as, DGT is yet to have a standardized counselling management
and grand strategy.
13. In 2011, DGT performed 16,078 tax information dissemination and public relation
activities or 100.49% of the targeted 16,000 activities.
14. Until the end of 2011, all Tax Offices have completed mapping activity that has been
adjusted with the result of data update, so the achievement was 100%.
15. The target of taxpayers profiling for 2011 was 476,728 (consisted of 1,500 taxpayers
from every Small Taxpayer Office and all taxpayers registered at Medium Taxpayer
Offices, Tax Offices within the area of Large Taxpayer Regional Tax Office, and Tax
Offices within the area of Jakarta Special Regional Tax Office). By the end of 2011,
470,678 taxpayers profiles have been finalized or 98.73% of the target.
16. In 2011, DGT completed the benchmarking for 19 business sub-sectors, namely:
a. oil palm plantation sub-sector;
b. vegetable and animal crude oil (cooking oil) industry sub-sector;
c. self-owned or rented real estate sub-sector;
d. road, bridge, and runway construction sub-sector;
e. other civil construction sub-sector;
f. large trading of household appliances and equipment;
g. large trading of chemical and pharmaceutical goods for domestic/household use
sub-sector;
h. business and management consulting service sub-sector;
i. four-wheel or more vehicle equipment and industry component sub-sector;
j. weaving industry sub-sector (except for gunny sack and other sacks);
k. knitting industry sub-sector;
l. ready-to-wear garment and textile industry sub-sector;
m. rural bank sub-sector;
n. iron and steel basic metal industry sub-sector;

31
Disputes
Settlement
o. large trading of motorbikes together with the spare parts and accessories sub-
sector;
p. sawmill industry sub-sector;
q. printing industry sub-sector;
r. other large trading sub-sector; and
s. retail trading of goods, particularly food, beverages, or tobacco, inside a building
other than supermarket sub-sector.
17. Until the end of 2011, 31,879 audit reports have been completed of the 39,644
targeted audit reports.
18. Realization of KPI on tax arrears collection for 2011 was 37.7% or 188.7% of the
targeted 20%. The net amount of tax receivable at the beginning of the year was
Rp32.9 trillion. This was as a result of some extra efforts, such as:
a. confinement to tax bearer;
b. blocking of taxpayers bank account;
c. tax collection to tax bearer.
19. In 2011, there were 24 investigation files declared to be completed (P-21 status) of the
total 20 targeted files; hence, the achievement was 120%.
20. By the end of 2011, the number of officials whose Job Person Match (JPM) index >
72% was 1,865 officials of 2,362 officials who have participated in the assessment
(78.96%). The target for 2011 was 1,890 DGT officials (80%) with JPM index > 72%.
The details are as follows:
Echelon Participants JPM > 72% %JPM > 72%
II 46 39 85%
III 338 306 90,53%
IV 1.978 1.520 76,85%
Total 2.362 1.865 78,96%
21. Average training hours per personnel in 2011 was 31.23 hours from the targeted 25.9
hours; thus, achievement of KPI on the percentage of employees training hours to
working hours was 120%.
22. Seventy five out of 32,582 employees were charged severe and medium level of
disciplinary sanction as a follow up to the findings of the Inspectorate General of
Ministry of Finance Audit Report, DGTs internal compliances unit, and employees
direct supervisors.
23. During 2011, an organizational refinement was conducted by establishing Taxation
Data and Document Processing Office in Makassar and External Data Processing
Office in Jakarta, as well as expanding the working area of Taxation Data and Document
Processing Center.
24. SOP finalization in 2011 comprised of 577 SOPs from the targeted 428 SOPs, with the
following details:
Organization
Description Tax and Human Information Total
Administration Resource Technology
New SOP 183 208 32 423
Revised SOP 76 75 3 154
Total 259 283 35 577

32
25. Risk Owner Unit (echelon II unit) is obliged to submit the report on application of risk
management each semester. In 2011, Risk Owner Units that have submitted the report
were 45 units; this exceeded the target of 27 units.
26. KPI on the completion of information system module development in relation with DGT
strategic plan was 100%, with the completion of the following five modules:
a. Development of National Tax Census software;
b. Establishment of Taxation Data and Document Processing Office Makassar;
c. Procurement of information technology hardware and its supporting tools;
d. Development of Dashboard software; and
e. Evaluation on the use of spatial data.
27. Total realization of non-personnel budget for 2011 was Rp2,794.07 billion of the
maximum limit of Rp3,484.33 billion. The budgets absorption was 80.19% or 100.24%
from the targeted 80%.
During the 2011 State Budget preparation, the Government projected that economic
B Tax Revenue
condition in Indonesia would be better than 2010. Thus, economic growth was targeted
higher than the estimation of 2010. Meanwhile other macroeconomic indicators were
estimated to be relatively stable. Based on the above assumptions, the state revenue and
grants for 2011 were planned to be Rp1,104.90 trillion, consisting of Rp850.26 trillion
tax revenue, Rp250.91 trillion non-tax revenue, and Rp3.74 trillion grants. The target of
tax revenue comprised of Rp827.25 trillion domestic tax and Rp23.01 trillion international
trade tax.
Assumptions of Macroeconomic 2011

Macro Assumptions 2010 2011
Indicators 2011 Realization State Revised State Realization
Budget Budget
Economic Growth (%) 6.1 6.4 6.5 6.46
Inflation (%) 6.96 5.30 5.65 3.79
Average Interest Rate of 3 Months SBI (%) 6.57 6.50 5.60 4.84
Exchange Rate (Rp/US$1) 9,078.25 9,250.00 8,700.00 8,742.00
ICP (US$/barrel) 79.40 80.00 95.00 111.50
Lifting (million barrel/day) 954 970 945 898
Source: Government Financial Report (Laporan Keuangan Pemerintah Pusat/LKPP) and IMF
Due to changes of macroeconomic basic assumptions, changes of fiscal policies, and

to secure the implementation of 2011 State Budget, the Government has undertaken
adjustments on various targets of economic growth for 2011, among others, by revising
the state revenue target from the tax sector to Rp878.69 trillion.
Upon the revision of 2011 State Budget, the tax revenue target excluding Oil and Gas
Income Tax was Rp698.44 trillion or 24.43% increase compared to the realization in 2010.
Furthermore, the tax revenue target including Oil and Gas Income Tax was Rp763.67 trillion
or 23.13% increase.

33
Disputes
Settlement
(billion rupiah) Tax Revenue Target based on State

Type of Tax State Budget Revised Budget and Revised State Budget 2011
State Budget
Non-Oil & Gas Income Tax 364,940.18 366,746.35
VAT & Sales Tax on Luxury Goods 312,109.98 298,441.39
Land & Building Tax 27,682.39 29,057.80
Other Tax 4,200.07 4,193.82
Total Revenue excluding Oil & Gas Income Tax 708,932.62 698,439.36
Oil & Gas Income Tax 55,553.61 65,230.67
Total Revenue including Oil & Gas Income Tax 764,486.23 763,670.03
900 Comparison of 2010 Tax Revenue

800
Realization, Tax Revenue Target
700
of 2011 State Budget,
764.49
763.67
708.93
600
698.44
trillion rupiah
and Tax Revenue Target of 2011

500
620.20
Revised State Budget

561.33
400
300
200
100
0
Tax Revenue Excluding Oil & Tax Revenue Including Oil &
Gas Income Tax Gas Income Tax
2010 Realization 2011 State Budget 2011 Revised-State

Target Budget
Source: Government Financial Report

Note: This figure does not take into account the Acquisition Duty of Right on Land & Building realization
In 2011, net tax revenue including Oil and Gas Income Tax was Rp742.74 trillion or 19.76%
increase compared to the tax revenue in 2010. That amount reflected a 97.26% of tax
revenue target of Rp763.67 trillion in 2011 Revised State Budget.
Net tax revenue excluding Oil and Gas Income Tax in 2011 was Rp669.65 trillion, or
19.30% increase compared to the tax revenue in 2010. This showed a 95.88% of tax
revenue target of Rp698.44 trillion in 2011 Revised State Budget.
800 Comparison of DGT Revenue

700
Realization in 2010 and 2011
742.74
600
trillion rupiah
669.65
620.20
500
561.33
400
300
200
100
0
Tax Revenue Excluding Oil & Tax Revenue Including Oil &
Gas Income Tax Gas Income Tax
2010 Realization 2011 Realization

Note: This figure does not take into account the Acquisition Duty of Right on Land & Building realization

34
Revenue Realization Proportion per

Type of Tax in 2011
48.20%
9.84%
37.40%
0.53%
4.02%
Non-Oil & Gas Income Tax Land & Building Tax Oil & Gas Income Tax
VAT & Sales Tax on Luxury Other Tax

Goods
Comparison of 2010 Revenue 400

Realization, 2011 Revenue Target, and
350
2011 Realization by Type of Tax
366.75
358.03
300
298.17
298.44
250
trillion rupiah
277.80
200
230.60
150
73.10
65.23
100
58.87
28.58
29.06
29.89
50
3.97
4.19
3.93
-
Non-Oil & Gas VAT & Sales Land & Other Tax Oil & Gas
Income Tax Tax on Luxury Building Tax Income Tax
Goods
2010 Realization 2011 Target 2011 Realization
The revenue growth according to the type of tax can be elaborated as follows:
a. Non-Oil and Gas Income Tax was Rp358.03 trillion or grew by Rp59.85 trillion
(20.07%) compared to Rp298.17 trillion revenue in 2010;
b. VAT and Sales Tax on Luxury Goods were Rp277.80 trillion or grew by Rp47.19
trillion (20.47%) compared to Rp230.60 trillion revenue in 2010;
c. Land and Building Tax was Rp29.89 trillion or grew by Rp1.31 trillion (4.59%)
compared to Rp28.58 trillion revenue in 2010;

35
Disputes
Settlement
d. Other taxes were Rp3.93 trillion or experienced Rp0.04 trillion (-1.02%) minus
growth compared to Rp3.97 trillion revenue in 2010;
e. Oil and Gas Income Tax was Rp73.10 trillion or grew by Rp14.22 trillion (24.16%)
compared to Rp58.87 trillion revenue in 2010.
Tax Revenue Performance
2007 2011
Description 2007 2008 2009 2010 2011
National Revenue (trillion rupiah) 706.11 979.30 847.10 992.25 1,205.35
Tax Revenue (trillion rupiah) 490.99 658.70 619.92 723.31 873.87
Revenue Including Oil & Gas Income Tax (trillion rupiah) 425.37 571.11 544.53 620.20 742.74
Oil & Gas Income Tax Revenue(trillion rupiah) 44.00 77.02 50.04 58.87 73.10
Revenue Excluding Oil & Gas Income Tax (trillion rupiah) 381.37 494.09 494.49 561.33 669.65
Revenue Growth Including Oil & Gas Income Tax (%) 18.75 34.26 (4.65) 13.90 19.76
Revenue Growth Excluding Oil & Gas Income Tax (%) 21.07 29.56 0.08 13.52 19.30
Economic Growth (%) 6.30 6.20 4.50 6.10 6.46
Inflation (%) 6.59 11.06 2.78 6.96 3.79
Natural Growth (%) 13.31 17.95 7.41 13.48 10.49
Revenue Performance Improvement Including Oil & Gas Income Tax (%) 5.45 16.31 (12.06) 0.41 9.26
Revenue Performance Improvement Excluding Oil & Gas Income Tax (%) 7.76 11.61 (7.32) 0.03 8.80
Notes: Revenue Performance Improvement = Revenue Growth Natural Growth

Tax Revenue 2007 2009 including Acquisition Duty of Right on Land & Building
Tax Revenue 2010 2011 excluding Acquisition Duty of Right on Land & Building

36
C DGT DGT has launched Tax Reform Part Two which was marked with the initiation of Project
Quick Wins for Indonesian Tax Administration Reform (PINTAR). In order to support this project and to
2011 2012 create added values for the existing business processes, DGT has identified 19 initiatives
related to business processes refinement and information technology optimization to help
DGT improve its performance. These initiatives are called DGT Quick Wins 2011 2012
because they can produce significant outcomes within a relatively short period of time.
DGT Quick Wins initiatives are expected to align with DGTs strategic plans, by improving
quality of data capture on Tax Return and Tax Payment Slip, increasing the number of
taxpayers, and preparing for PINTAR implementation.
Until the end of 2011, almost all of DGT Quick Wins initiatives, which were launched in
August 2011, have approached finalization process. Quick Wins initiatives are expected to
sustain the entire DGT business processes in order to create a more effective, reliable, and
modern tax administration system.
Progress of DGT Quick Wins

2011 2012
No. Quick Wins Initiatives Progres

Priorities
(%)
I.1. Loading Tax Return data to the DGT Information System using Web Service Major 98
I.2. Systematic database and hardware tuning for the DGT Information System Major 98
I.3. Developing procedure to actively monitor data processing in the DGT Information System and quick Major 75
response to any problems
I.4. Data cleansing to eliminate duplication of Taxpayer Identification Number Major 95
I.5. Refinement of Output Tax Input Tax applications Major 98
I.6. Improvement of data entry process at the Taxation Data and Document Processing Center Major 70
I.7. Development of taxpayers profiling system Major 95
I.8. Systematic collection of third partys data Medium 80
I.9. Development of tools and methodologies for automation of taxpayers compliance activities monitoring Medium 80
I.10. Development of tools and methodologies for automation of collection based on risk, reward, and aging Medium 80
I.11. Improvement of State Revenue Module (MPN) interface with DGT Information System/Tax Information Medium 95
Modification System
I.12. Reconciliation/audit of State Revenue Module (MPN) with State Treasury Service Office (KPPN) data Medium 5
I.13. Review of DGT Information System software to improve software performance Continuous 50
I.14. Review of Tax Office infrastructure (hardware and network) Continuous 98
II.1. Development of tax payment monitoring through MIS/EIS Major 95
II.2. Development of human resources audit allocation based on risks and potentials Major 75
II.3. Addition of new Data Processing Center Major 75
II.4. Promotion and demotion of taxpayers Medium 100
II.5. Improvement of services to large corporate taxpayers and high wealth individuals at Large Taxpayer Medium 55
Office through quick wins services and low-cost compliance
Note: Data as of 31 December 2011

37
Disputes
Settlement
D
1. Best Unit in Tax Revenue Performance Operational
Unit
In 2011, DGT employed different performance measurement for the operational units from Achievement
previous years by modifying a more proportional index. This measurement includes not
only the growth of tax revenue and achievement of tax revenue target, but also the tax
revenue realization element.
The element of tax revenue realization takes into account work load for each operational
unit based on its revenue target size under its responsibility and the complexity of taxpayers
handling. This is congruence with the organizational concept that different treatment should
be given to each unit according to its contribution to the national revenue.
At the 1st 2012 DGT National Management Meeting, the Director General of Taxes presented
awards to units with high performance in 2011. This award is expected to motivate the
entire DGT personnel to continuously make efforts in obtaining tax revenue target.
The Best Operational Unit in

Cluster Rank/Unit
Tax Revenue Performance 2011
Regional Tax Office (RTO) 1. Central Jakarta RTO
2. Bengkulu & Lampung RTO
3. Large Taxpayer RTO
4. North Jakarta RTO
5. West Kalimantan RTO
Tax offices with the highest tax revenue 1. Central Jakarta Medium Taxpayer Office (MTO)
contribution 2. State-Owned Enterprise Taxpayer Office
3. Makassar MTO
4. North Jakarta MTO
5. Surabaya MTO
Small Taxpayer Office (STO) I 1. Jakarta Setiabudi III STO
(Revenue > Rp1 trillion) 2. Kudus STO
3. Jakarta Kebayoran Baru I STO
4. Jakarta Pasar Minggu STO
5. Jakarta Gambir III STO
STO II 1. South Badung STO
(Revenue Rp500 billion - Rp1 trillion) 2. Jakarta Tambora STO
3. Jakarta Penjaringan STO
4. Jakarta Menteng I STO
5. Sampit STO
STO III 1. West Medan STO
(Revenue < Rp500 billion) 2. Medan Belawan STO
3. Demak STO
4. Surabaya Krembangan STO
5. Argamakmur STO

38
2. Achievement of Kring Pajak 500200 (Call Center)
In 2008, DGT established a contact center under the name Kring Pajak 500200, which
serves as information service and complaint center. Kring Pajak 500200 is DGTs efforts to
achieve clean government by implementing the principles of good governance with active
support and participation from the public.
Since its operation in 2008, the service quality of Kring Pajak 500200 has undergo
continuous refinement in order to meet public demands for tax information which are more
accurate, easy access, inexpensive, and unrestricted by time and place.
The service quality is improved by conducting intensive personnels trainings, which provide
sufficient communication skills, knowledge in taxation, by updating system application, as
well as by refining the standards of operating procedures (SOP). These efforts proved to be
fruitful as evidenced by various awards achieved both nationally and internationally.
Achievement of Kring Pajak 500200

National Level Organized by Indonesia Contact Center Association (ICCA)
in 2011
1st Place (Platinum) for The Best Quality Assurance below 100 seats category
3rd Place (Silver) for The Best Quality Assurance below 100 seats category
2nd Place (Gold) for The Best Back Office Operational below 100 seats category
2nd Place (Gold) for The Best Agent Operational below 100 seats category
3rd Place (Silver) for The Best Agent Operational below 100 seats category
4th Place (Bronze) for The Best Supervisor below 100 seats category
4th Place (Bronze) for The Best Contact Center Got Talent category
International Level Organized by Contact Center World (CCW)
1st Place (Gold Medal/Top Ranking Performance in Contact Center World/ Contact Center
Best Practice) for Direct Response Campaign at Asia Pacific regional level in Gold Coast
Australia
1st Place (Gold Medal/Top Ranking Performance in Contact Center World/ Contact Center
Best Practice) for Direct Response Campaign at world championship level in Las Vegas,
United States of America
4th Place Outbound Telemarketer at Asia Pacific regional level in Gold Coast Australia
4th Place for Supervisor category at Asia Pacific regional level in Gold Coast Australia
3. Public Service Office Model
In the era of information transparency, public demands for higher quality public services
have become more obvious and stronger. The Ministry of Finance, as one of the ministries/
institutions that has various types of public service offices, tries to respond to those
demands by undertaking various programs to improve service performance and increase
public satisfaction.
One of the annual activities conducted by the Ministry of Finance to boost the improvement
of public service quality is the selection of Public Service Office Model (KPPc). This activity
begins with the selection of public service offices at echelon I level. Winners of public
service office model at echelon I level are proposed to take part in the selection at the
ministerial level.

39
Disputes
Settlement
Several components for judgment in the selection include, among others, systems and
procedures, Human Resources, office facilities and infrastructure. The judgment methods
consist of direct observation, interview with the office management and staff, and collection
of the secondary data, such as public complaints and survey through the dissemination of
questionnaires to the public as the service users.
The selection is expected to encourage the entire units within the Ministry of Finance to
take effort, to be creative and innovative for the improvement of quick wins services in
order to achieve Good Governance.
The Winners of Public Service Office

Rank Unit
Model at DGT Level in 2011
1 Large Taxpayer Office I
2 Ciamis STO
3 Lubuk Linggau STO
4 Foreign Investment Company Taxpayer Office II
5 East Tangerang STO
6 Pangkalanbun STO
For the selection of public service office model in 2011 at the Ministry of Finance level,
Large Taxpayer Office I was awarded as the third winner.

40 The growing demand of stakeholders towards DJP performance
2011 encourages us to always make a breakthrough and innovation in
performing duties and taking responsibilities.
Annual Report

41
2011
Annual Report
Significant
Events
03
The launching of National Tax Census program
and the Values of the Ministry of Finance was an
important momentum for DGT to establish the
foundation for the future in its effort to implement
the mission in tax revenue collection.
Membina
Fostering
Tanggung
Responsibility
Jawab Through
melalui Optimisme
Optimism

42
A National National Tax Census (Sensus Pajak Nasional) is one of the programs carried out by DGT to
Tax Census explore tax potency through tax object data collection for the purposes of broadening the
tax base and securing state revenue.
The rationale behind National Tax Census is that economy grows rapidly throughout
Indonesia, marked by the increase of economic activity centers (business districts), high-
rise buildings, luxurious residential areas, and business entrepreneurs, meanwhile the total
number of registered taxpayers remains relatively low.
By the end of 31 December 2011, the number of registered individual taxpayers was 19.9
million taxpayers while the number of submitted Annual Income Tax Returns for Individual
was 8.5 million. Based on the Statistics Indonesia data, the number of active work force in
Indonesia was 110 million. This means that the ratio of the registered individual taxpayers
and Annual Tax Returns submitted against active work force were only 18.1% and 7.73%,
respectively. It shows that compliance level of individual taxpayers is still low.
Similar condition also happens in corporate taxpayers. The number of registered corporate
taxpayers was 1.9 million taxpayers while the number of submitted Annual Income Tax
Returns for Corporate was 466,000. Based on the Statistics Indonesia data, the number
of registered corporations with active status was 12.9 million. This means that the ratio of
the registered corporate taxpayers and Annual Tax Returns submitted against the number
of active corporations was 14.8% and 3.6%, respectively. It shows that compliance level of
corporate taxpayers is also still low.

43
Disputes
Settlement
The low level of compliance caused the low tax ratio which currently ranges from 11% to
12%. In comparison, the tax ratio of our neighbouring countries is above 14%.
Essentially, National Tax Census can be regarded as an attempt to apply justice in the
area of taxation, where all tax subjects fulfill their tax obligations according to the laws and
regulations. National Tax Census aims to capture all tax potency in line with Indonesian Tax
Philosophy (Tri Dharma Perpajakan), namely:
a. all taxpayers are registered;

b. all taxable objects are taxed;
c. all taxes are fulfilled timely and correctly.
In his speech at the submission of Government Statement regarding the Bill on State
Budget for Fiscal Year 2012 together with the Financial Memorandum on 16 August
2011, the President stated that in order to optimize tax potency exploration, in September
2011 the Government had planned to carry out National Tax Census. Ministry of Finance
followed it up by issuing several regulations for National Tax Census, namely:
a. Regulation of the Minister of Finance Number 149/PMK.03/2011 regarding

National Tax Census;
b. Decree of the Minister of Finance Number 304/KMK.03/2011 regarding the
Establishment of National Tax Census Team; and
c. Regulation of the Director General of Taxes Number PER-30/PJ/2011 regarding
National Tax Census Technical Guidelines.
National Tax Census 2011 activity was launched nationally on 30 September 2011 by
the Minister of Finance, Agus D.W. Martowardojo, accompanied by the Governor of DKI
Jakarta, Fauzi Bowo, and the Director General of Taxes, A. Fuad Rahmany, at Jakarta
International Event & Convention Center (JITEC) Building, Mangga Dua Square.
Methodologies used in the National Tax Census in general are as follows:
a. census is conducted simultaneously throughout Indonesia by Small Taxpayer

Offices;
b. census location is selected based on mapping result and fiscal monograph with
priority of economic activity centers/business districts, high-rise buildings, and
luxurious residential areas (potential areas);
c. census is carried out gradually and continuously;
d. census collects data on all census subjects and objects in the census locations
using Census Form (CF) and followed by counseling and sending notice;
e. census attaches stickers at business places and residences upon the completion
of census;
f. data resulted from the census is recorded/updated; and
g. census time selected is suitable with the condition of the census subjects (morning,
afternoon, evening).
National Tax Census took place during the months of October and November 2011 at
299 Small Taxpayer Offices in Indonesia. National Tax Census 2011 managed to collect
646,655 CFs or 62.73% of the target 1,030,903 CFs and 523,961 CFs are recorded/
documented.

44
CF Collection in 2011
for each Category
68.52%
15.68%
13.45%
2.35%
Category 1 : Respondent can be met in the census location, and is willing to respond and to
sign the CF.
Category 2 : Respondent can be met in the census location, but is not willing to respond and
to sign the CF.
Category 3 : Respondent is not in the census location, but there is another party having
connection with the respondent.
Category 4 : Census object is not inhabited.
Note: Data as of 2 February 2012
Based on CF Category 1, 2, and 3 recorded, the number of respondents who did not have
Taxpayer Identification Number was 283,348 or 54.71% and the number of respondents
who have already had Taxpayer Identification Number was 234,515 or 45.29%.
Respondents who did not have Taxpayer Identification Number will be followed up with
extensification activities, while those who have registered as taxpayers will be followed up
with supervision according to the SOP.
The Ministry of Finance has once again become the forerunner in the implementation
B Formulation and
Internalization of of bureaucracy reform in Indonesia by formulating values and implementing them in the
organization. The values of the Ministry of Finance include, Integrity, Professionalism,
the Ministry of
Synergy, Service, and Excellence, which are decided through the Decree of the Minister of
Finance Values
Finance Number 312/KMK.01/2011 and will replace the values previously formulated and
owned by each echelon I unit within the Ministry of Finance.
The former Values of DGT used as guidelines in the implementation of employees duties
and the values implemented by other echelon I unit basically have good meanings and
goals. However, to achieve the Ministry of Finance vision, improvement of inter-echelon
I unit synergy is necessary. Therefore, Ministry of Finance formulated values to be
implemented in all units of Ministry of Finance.

45
Disputes
Settlement
The process of formulating the values of the Ministry of Finance began with exploring ideas
from the management at the Ministry of Finance on the objectives and the forms of their
attainment required by the Ministry of Finance.
Key Behaviour Guidelines of Values of the Ministry of Finance
Integrity Think, talk, behave, and act properly and righteously 1. Act honestly, sincerely, and trustworthy.
according to code of ethics and moral principles. 2. Maintain dignity and act properly and
righteously.
Professionalism Work thoroughly and accurately based on the 1. Have broad skills and knowledge.
best competencies with full responsibility and high 2. Work wholeheartedly.
commitment.
Synergy Build and ensure productive internal cooperation and 1. Be positive thinking with trust and respect
harmonious partnership with stakeholders, to produce for each other.
useful and high quality work. 2. Find and implement the best solutions.
Service Provide services wholeheartedly, transparently, 1. Provide services oriented to stakeholders
fast, accurately, and safely, to meet stakeholders satisfaction.
satisfaction. 2. Act proactively and responsively.
Excellence Perform continuous improvement in every aspect to 1. Undertake continuous improvement.
become and give the best. 2. Develop innovation and creativity.
After the values have been formulated and identified, internalization of the values must
be implemented at all units within the Ministry of Finance in order for the values not to be
merely considered as a symbol.
On 22 October 2011, DGT was honored to host the Kick-Off of the Ministry of Finance
Values, attended by the Minister of Finance, Deputy Minister of Finance, senior officials
and representatives of echelon I units of the Ministry of Finance. At the Cakti Budhi Bakti
Auditorium, DGT Head Office, the Minister of Finance conveyed his message to all invitees
to comprehend and implement the values of the Ministry of Finance at all times in their day-
to-day duties to make the Ministry of Finance the best state financial and asset manager
in the region.
The above event also served as the first internalization activity of the Ministry of Finance
values at DGT, which was followed and implemented by the operational units within the
DGT. The launching of the Ministry of Finance values at each Regional Tax Office took place
on 9 December 2011 in conjunction with the commemoration of Worlds Anti Corruption
Day.

46
2011
Annual Report
What we do now is a form of our responsibility for future generations.
This inspired us to always strive for excellence at all times.

47
2011
Annual Report
Refinement of
Tax Policies
04
In 2011, the Government released Government
Regulation Number 74 Year 2011 regarding
Procedures for the Exercising of Tax Rights and
Fulfillment of Tax Obligations. The regulation was
released to allow more flexibility and clarity for the
public to understand their tax rights and fulfill their
tax obligations, and to harmonize the provisions
among the Law on General Provisions and Tax
Procedures, Income Tax Law, and VAT and Sales
Tax on Luxury Goods Law.

48
DGT as the tax authority in Indonesia is given the mandate to carry out the duty of
formulating and implementing technical policies and standardization in taxes. To improve
good governance in the fiscal policy area, in 2011 the Minister of Finance launched a new
policy that the formulation of tax policies regulating tax subject, object, and tariffs, which
will affect state revenue, is to be carried out by the Fiscal Policy Office while still maintaining
recommendation and consideration from DGT.
A
To implement Article 48 of the Law on General Provisions and Tax Procedures, the
The General
Government released Government Regulation Number 80 Year 2007 regarding Procedures
Provisions and
for the Exercising of Tax Rights and Fulfillment of Tax Obligations. Upon its implementation,
Tax Procedures

49
Disputes
Settlement
the society requires the Government to improve and to refine that regulation to allow
more flexibility and clarity for the public in understanding and fulfilling their tax rights and
obligations, and to harmonize the provisions within the Law on General Provisions and Tax
Procedures, Income Tax Law, and VAT and Sales Tax on Luxury Goods Law.
The process of formulating the refinement plan of the provisions under Government
Regulation Number 80 Year 2007 began with requesting insights from stakeholders, such
as the Taxes Monitoring Committee, Tax Consultant Association of Indonesia, Tax Court,
and DGT operational units. Furthermore, discussion on Government Regulation Draft was
conducted by involving the Legal Bureau of the Ministry of Finance, the Fiscal Policy Office,
the Ministry of Law and Human Rights, the State Secretariat, and Attorney General of
Indonesia.
On 29 December 2011, the Government released Government Regulation Number 74

Year 2011 on Procedures for the Exercising of Tax Rights and Fulfillment of Tax Obligations
that repealed Government Regulation Number 80 Year 2007. This Government Regulation
effectively comes into force starting from 1 January 2012.
The Government Regulation Number 74 Year 2011 regulates the following substances.
a. elucidation of lawsuit as referred to Article 23 of the Law on General Provisions and

Tax Procedures;
b. confirmation of the implementation of Tax Treaty, such as Mutual Agreement
Procedure, Advance Pricing Agreement, and Exchange of Information;
c. disclosure of incorrect completion of Tax Return as referred to Article 8 paragraph
(3) of the Law on General Provisions and Tax Procedures;
d. revocation of administrative sanctions as referred to Article 36 of the Law on
General Provisions and Tax Procedures; and
e. verification for the issuance and termination of Taxpayer Identification Number,
confirmation and annulment of Taxable Entrepreneur for VAT Purposes, and
issuance of Notice of Tax Assessment.
In 2011, DGT intensively undertook discussion on Government Regulation Draft to

implement Article 35A of the Law on General Provisions and Tax Procedures which
regulates the obligation of external parties to provide tax-related data and information to
DGT. Tax-related data and information from other government institutions, foundations,
associations, and other external parties are highly needed by DGT to monitor compliance
of tax obligations as a consequence of self assessment system. Tax-related data and
information contain individuals and corporates data and information which reflect their
activities or businesses, omzet, income and/or asset, including information of debtors/
customers, financial transactions, foreign exchange, credit cards, and financial reports.
In 2011, DGT also proposed a Government Regulation Draft on the Provision and Collection
of Tax-Related Data and Information. This has been discussed with various institutions,
such as the Legal Bureau of the Ministry of Finance, the Ministry of Law and Human Rights,
the State Secretariat, the Indonesian National Police, and the Central Bank of Indonesia.
Until the end of 2011 this draft was still in finalization stage.

50
Several refinement regulations were released during 2011 as follow:
a. procedures on calculation and provision on interest compensation;

b. procedures on calculation and refund of tax overpayment;
c. procedures on tax audit; and
d. procedures on termination of tax criminal investigations to secure the state
revenue.
Several provisions on Income Tax released in 2011 which regulate among others:
B Provisions on
Income Tax
a. revocation of provision on Income Tax from term contracts which are traded at the
stock exchange;
b. income tax incentive for investment in certain businesses sectors and in certain
areas;
c. tax treatment over Taxable Income after being deducted with tax of a Permanent
Establishment and the procedures for its notification by taxpayers;
d. procedures on recording and reporting donations to overcome national disasters,
donations for research and development, donations for educational facilities,
donations for sports development, and expenses for the development of social
infrastructure, which is deductible from gross income;
e. procedures for withholding, paying, and reporting Income Tax on obligation
interest;
f. procedures for calculation and payment of Income Tax on the surplus of the
Central Bank of Indonesia;
g. provision on Corporate Income Tax exemption or reduction incentive for corporate
taxpayers concerning:
1) procedures for reporting the use of investment fund and realization; and
2) procedures for stipulation of the beginning of commercial production;
h. imposition on Income Tax for Islamic banking and Islamic financing activities;
i. determination on operational cost that can be refunded and Income Tax treatment
on oil and gas upstream business activities, concerning:
1) expenditure limitation on indirect cost allocated from head office which
is refundable in profit sharing calculation and Income Tax for oil and gas
contractors;
2) withholding and payment procedures on Income Tax on contractors other
income, namely uplift or other similar compensations and contractors income
from transfer of participating interest;
3) maximum limit of expatriates remuneration cost for oil and gas Cooperation
Contract Contractors;
4) forms and content of Annual Income Tax Return for taxpayers undertaking oil
and gas upstream business activities; and
5) procedures on the issuance of Notice of Tax Payment for oil and gas Income
Tax and its Temporary Notice Letter;
j. determination of domestic taxable subjects and foreign taxable subjects; and
k. procedures for submitting request of deduction and collection of Income Tax by
other party;
l. procedures for filing and evaluating request for refund of overpayment tax which
should not be withheld for domestic taxpayers;
m. procedures for Income Tax Article 22 withholding with regard to payment on
delivery of goods and other import activities or business activities in other sectors;
n. agencies/institutions established and legalized by the government that are decided
to be the recipients of alms or obligatory religious donations that can be deducted
from gross income.

51
Disputes
Settlement
C
Provisions on VAT and Sales Tax on Luxury Goods released in 2011 regulated among Provisions on VAT
others: and Sales Tax on
Luxury Goods
a. adjustment of selling prices limit of Simple Houses and Very Simple Houses
exempted from VAT imposition;
b. procedures for the provision of budget, calculation, payment, and accountability of
subsidy of certain types of fuel. One of the provisions regulated is VAT on subsidy
of certain types of fuel which is a part of price subsidy. The VAT mechanism
replaces the mechanism of VAT Bourne by the Government;
c. procedures for filing and completion of refund claim of VAT for foreign passport
holder;
d. limitation on taxable activities and types of services which its export is imposed
with VAT;
e. administration procedures on VAT Bourne by the Government on the delivery of
domestic simply packaged cooking oil and bulk palm oil;
f. certain documents regarded equivalent with Tax Invoice; and
g. procedures for issuing Tax Invoice and Tax Payment Slip upon delivery of certain
types of fuel and/or 3-kilogram canned liquified petroleum gas (LPG).
In addition to the release of the above provisions, in 2011 DGT also conducted discussions
on several regulation drafts in VAT, namely:
a. Government Regulation Draft on Import and/or Delivery of Certain Strategic

Taxable Goods Exempted from VAT Imposition. This Draft was planned to replace
Government Regulation Number 12 Year 2011 on Import and/or Delivery of
Certain Strategic Taxable Goods Exempted from VAT Imposition as amended
several times, the last one through Government Regulation Number 31 Year 2007.
In this Draft, simply packaged cooking oil was included as certain strategic Taxable
Goods.
b. Regulation of the Minister of Finance Draft on the Second Amendment of the
Decree of the Minister of Finance Number 231/KMK.03/2001 regarding VAT and
Sales Tax on Luxury Goods Treatment on Taxable Imported Goods Exempted from
Duty Charges. This draft stipulated that oil and gas upstream exploration business
activities as well as geothermal was not subject to VAT and Sales Tax on Luxury
Goods and exempted from Duty Charges. It has been enacted into the Regulation
of the Minister of Finance Number 27/PMK.011/2012.
Several provisions on Land and Building Tax released in 2011 regulated:

Provisions
on Land and D
a. request for refund of Land and Building Tax overpayment;
Building Tax
b. adjustment of the amount of Sales Value of Non-Taxable Object of Land and
Building Tax;
c. procedures for determining taxpayers of Land and Building Tax Objects whose
taxpayers could not be identified and revocation of registered taxpayers;
d. forms and content of calculation note (Nota Penghitungan), Notice of Tax
Assessment for Land and Building Tax, Notice of Tax Collection for Land and
Building Tax, Notice of Overpayment Assessment on Land and Building Tax, and
Notice;
e. imposition of Land and Building Tax for forestry sector; and
f. procedures for installment and postponement procedures on Land and Building
Tax payment.

52
With regard to the steps in the transfer of Land and Building Tax Rural and Urban Areas
(PBB Perdesaan dan Perkotaan/PBB-P2) as Local Tax according to the Law Number 28
Year 2009 regarding Local Taxes and Retribution, during 2011 DGT together with the
team from the Ministry of Finance carried out monitoring and evaluation on the preparation
of transferring and implementation of Land and Building Tax Rural and Urban Areas
collection to the regency/city governments that have administered Land and Building Tax
Rural and Urban Areas.
To prepare the transfer and implementation of Land and Building Tax Rural and Urban
Areas running smoothly, DGT has released several policies, such as:
a. conducting monitoring on the preparation of managing Land and Building Tax

Rural and Urban Areas in seventeen regencies/cities which will manage Land and
Building Tax Rural and Urban Areas in 2012;
b. undertaking technical guidelines on managing Land and Building Tax Rural
and Urban Areas for the local governments. The implementation of this technical
guidelines is done by Regional Tax Offices and Small Taxpayer Offices in
coordination with Finance Education and Training Center as the venue provider;
c. encouraging Regional Tax Offices to set up a joint team with the local governments
to assist the regency/city governments at their working territories in the preparation
of Land and Building Tax Rural and Urban Areas collection;
d. undertaking workshop related to information technology, especially for the
installation and customization of Taxable Object Information Management System
(Sistem Manajemen Informasi Objek Pajak/Sismiop) software in seventeen
regencies/cities which will manage Land and Building Tax Rural and Urban Areas
in 2012; and
e. undertaking cooperation with State College of Accounting (Sekolah Tinggi
Akuntansi Negara/STAN), whose lecturers are mostly DGT personnel, to conduct
Diploma I program on Taxes concentrating in Land and Building Evaluation and
Operator Console.
Implementation of Transfer of Land and Number of

Year Remarks
Regencies / Cities
Building Tax Rural and Urban Areas
2011 1 The City of Surabaya
to the Local Governments
2012 17 The City of Medan, Deli Serdang Regency, The City of
Pekanbaru, The City of Palembang, The City of Bandar
Lampung, The City of Depok, Bogor Regency, The City of
Semarang, Sukoharjo Regency, The City of Yogyakarta,
Sidoarjo Regency, The City of Gresik, The City of
Pontianak, The City of Balikpapan, The City of Samarinda,
The City of Gorontalo, and The City of Palu
2013 60 Estimation is based on the local governments readiness
2014 419 Regencies/cities that are yet to manage Land and Building
Tax Rural and Urban Areas (PBB-P2) in 2011 2013
Note: Data for years 2012 2014, from Directorate of Fiscal Balance and DGT as of 1 Februari 2012

53
Disputes
Settlement
E
The terms for the provision of the latest tax incentives launched during 2011 as described Tax Incentive
below.
a. Exemption from VAT imposition on the handing over of Simple Houses and
Very Simple Houses which are obtained through cash payment or through both
subsidized and non-subsidized mortgage incentives, or through Islamic financing
system, and meet the following conditions:
1) total area of the building does not exceed 36m2;
2) selling price does not exceed Rp70,000,000; and
3) it is the first house owned, used as owners place of living, and will not be
transferred within five years since it is acquired.
b. VAT Bourne by the Government upon the domestic delivery of simply packaged
cooking oil and bulk palm oil by Taxable Entrepreneurs.
c. Provision of price and VAT subsidies over price subsidy of certain types of fuel and
3-kilogram canned LPG.
d. Deduction of net income up to 30%, accelerated depreciation and amortization,
loss compensation up to ten years, and imposition of Income Tax over dividend up
to maximum 10%. These incentives can be given to taxpayers investing in certain
business areas and certain regions.
e. Exemption of Corporate Income Tax which can be given for a period of maximum
ten fiscal years and minimum five fiscal years, effective per fiscal year of the
beginning of the commercial production, as well as Corporate Income Tax
reduction incentive by 50% of the Taxable Income for as long as two fiscal years
once the provision of Corporate Income Tax exemption ends. These incentives are
given to new corporate taxpayers meeting the following criteria:
1) pioneer industries, which include:
a) basic metal industry;
b) natural oil refinery industry and organic basic chemical industry sourcing
from natural oil and gas;
c) machinery industry;
d) industry in the area of renewable resources; and
e) communication device industry;
2) having new investment plans that have been legalized by the authorized
institutions amounting to at least Rp1 trillion; and
3) placing fund at the banks in Indonesia at least 10% of the total investment
plans and should not be withdrawn prior to the commencement of investment
realization.
f. Income Tax Bourne by the Government over:
1) outcome of geothermal resources business for power plant in Fiscal Year
2011; and
2) interest of government bonds issued in the international market and income
of a third party whose service is given to the government in the issuance of
government bonds in international market for Fiscal Year 2011.
g. Incentive for installment and postponement of Land and Building Tax payment for
taxpayers experiencing liquidity problem, financial difficulty, or force majeur so that
the taxpayers can fulfill their tax obligations in time.

54
2011
Annual Report
Commitment of each person to fulfill the responsibility of tax
obligation presents harmony and conformity in the life of a nation.

55
2011
Annual Report
Potency
Exploration
05
The tax revenue target, as the main contributor
of domestic revenue, increases every year. DGT
is obliged to secure the tax revenue by designing
and developing various strategies and methods
of potency exploration, which are structured,
measurable, systematic, standardized, and
supported with reliable data.

56
DGT always conduct every efforts to achieve tax revenue target. The efforts are by
broadening tax base (extensification) and by undertaking tax potency exploration to
registered tax subjects (intensification).
Extensification for individual taxpayers is an activity that included in DGT strategic map
A Extensification
of 2011. This activity is carried out to broaden the tax basis imposition by increasing the
number of taxpayers and improving taxpayers compliance.

57
Disputes
Settlement
Tax broadening activity is DGT proactive attempt in increasing the number of new
taxpayers by targeting at individual taxpayers who are obliged by the tax regulation to
acquire Taxpayer Identification Number with more ease in obtaining it. Certain approach is
used to target individuals whose income comes from employers including commissioners,
shareholders, directors, and employees at private companies or State-Owned Enterprises
and civil servants, both at the head offices and in the regional offices.
Another approach is a property-based by targeting at individual taxpayers who undertaking

or having business activities at trade centers, shops or shopping centers and those who
are living in apartments and luxurious residential areas within certain limit of property value.
Those two approaches are more focused on increasing the number of new taxpayers.
However, since 2010 the extensification program has also aimed at increasing tax revenue
through an extra effort policy. This policy is basically a follow up action to new taxpayers
as a result of extensification activities of current year and one year before as an attempt to
build awareness and to improve taxpayers compliance.
Along with extensification, in 2011 DGT launched National Tax Census program as
one of the breakthroughs to attain tax revenue target every year. National Tax Census
accommodates the implementation of extensification of taxpayers and intensification
attempt through primary data collection from the taxpayers. This program is a regional-
based national program which is conducted gradually by considering the potency. At
the initial stage, National Tax Census was done at economic activity centers or business
districts.
Extensification of Individual Taxpayers

2007-2011
Taxpayer 2007 2008 2009 2010 2011
1. Individual - Outcome of Extensification 1,756,531 4,892,032 9,019,975 10,922,128 12,208,981
a. Individual-Employee 1,639,815 4,648,324 8,606,567 10,433,183 11,670,075
b. Individual-Non Employee 116,716 243,708 413,408 488,945 538,906
2. Individual-Voluntary 3,231,918 3,496,784 4,929,775 6,405,056 7,704,923
c. Individual-Employee 1,375,237 1,496,400 2,471,589 3,543,625 4,504,701
d. Individual-Non Employee 1,856,681 2,000,384 2,458,186 2,861,431 3,200,222
3. Government Treasurer 348,451 379,681 434,355 467,984 507,844
4. Corporate 1,308,160 1,443,570 1,580,287 1,737,459 1,942,811
Total (1+2+3+4) 6,645,060 10,212,067 15,964,392 19,532,627 22,364,559
Note: Data as of 31 December for the year concerned, result of data cleansing 2011 (processed)

58
Taxpayers growth for the last five years is as shown in the graphic below.
Number of Taxpayers 2007-2011 25

22.36
0.51
19.53 1.94
20 0.47
1.74
15.96
0.43 7.70
15 1.58
6.41
million
10.21 4.93
12.21
10 0.38
10.92
1.44
6.65 9.02
0.35 3.50
1.31
5
4.89
3.23
1.76
-
2007 2008 2009 2010 2011
Individual - Outcome of Corporate Total Taxpayer

Extensification
Individual - Voluntary Government Treasurer
Note: Data as of 31 December for the year concerned, result of data cleansing 2011 (processed)
Regarding Land and Building Tax, extensification was done through data collection, namely
creation and maintenance data of Land and Building Tax objects and subjects to create
and maintain database in Taxable Object Information Management System (Sismiop) and
Geographic Information System (SIG). The objective of the data collection is to create an
accurate and up-to-date database of Land and Building Tax objects and subjects in order
to create a fair and equal tax imposition, to increase of assessment value base, to improve
the administration, to increase the Land and Building Tax revenue, and to provide better
service to taxpayers.
120
103.56 102.99
100.16
93.56 97.17
100 89.64
89.06
83.26
77.23
80
69.46
million
60
40
20
0
2007 2008 2009 2010 2011
Number of Tax Objects 2007-2011 Tax Object Tax Object-Sismiop
Note: Data as of December 31 for the year concerned

59
Disputes
Settlement
90 Number of Digital Maps 2007-2011
77.03
80 75.80 76.04
74.15
71.77
70
60
50
million
41.34
38.80
40 35.42
31.17
30 24.94
20
10
0
2007 2008 2009 2010 2011
Village/Sub-District Village/Sub-District in Digital Map
Note: Data as of December 31 for the year concerned
B
Optimization of tax revenue through intensification in 2011 was focus for revenue Intensification
determinant taxpayers at each Tax Office through the following programs/activities:
1. Periodic Payment Monitoring
Periodic payment monitoring is an activity undertaken to monitor periodic tax payment.

The objectives of this program are to secure tax revenue and to improve compliance of
taxpayers in performing their periodic payment obligations by taking into account the
contribution of periodic payment to national revenue which is around 75% (2009) and 77%
(2010).
Monitoring is performed for all periodic payment obligations over Income Tax Article 21,
Income Tax Article 22, Income Tax Article 23, Income Tax Article 25, Income Tax Article
26, Final Income Tax, and VAT/Sales Tax on Luxury Goods. Priority of periodic payment
control is given to:
a. all registered taxpayers at Large Taxpayer Offices and Medium Taxpayer Offices;
and
b. a thousand biggest taxpayers in Small Taxpayer Offices which have more than
1,000 taxpayers.
2. Utilization of Feeding
Feeding is a taxpayers data exchange program among Tax Offices by utilizing information
technology. The program which was launched in 2011 is used for updating of taxpayers
profiles, increasing tax revenue, and acquiring new taxpayers.

60
3. Monitoring of Government Treasurer Taxpayers
A treasurer has the duty to control the central and local government expenditures, whereas
in those expenditures the treasurer must perform withholding of Income Tax Article 21,
Income Tax Article 22, Income Tax Article 23/26, and Domestic VAT.
Considering the large amount of the central and local government expenditures, tax
revenue from treasurer sectors plays important roles. In order to do these roles, monitoring
is needed especially on the compliance of tax withholding, payment, and filing by the
treasurer.
Monitoring of treasurer taxpayers is focused on the reporting of Periodic Tax Return for
Income Tax Article 21, because of following reasons:
a. Income Tax Article 21 Treasurer has a significant contribution in the national

revenue of Income Tax Article 21 which is around 25%;
b. revenue of Income Tax Article 21 is the largest contributor to treasurer revenue at
around 90% of the total revenue from treasurer taxpayers; and
c. Income Tax Article 22, Income Tax Article 23, Final Income Tax, and other taxes are
occasionally occurred therefore they are difficult to control the compliance.
Tax potency exploration through treasurer monitoring program is done by:
a. monitoring of filing of Periodic Income Tax Return of Income Tax Article 21 for
Government Treasurer for quarterly period and mapping the status of Tax Return
filing into the punctual and the late ones; and
b. mapping of filing compliance ratio of Periodic Income Tax Return of Income Tax
Article 21 by the Government Treasurer.
Filing Trend of Periodic Income Tax Filing of Tax Return

Period
Return of Income Tax Article 21 Punctual Late Total
by Government Treasurer Year 2011 January 8,281 2,804 11,085
February 6,116 1,158 7,274
March 912 - 912
April 6,649 3,867 10,516
May 6,895 3,424 10,319
June 7,393 2,411 9,804
July 12,072 5,726 17,798
August 10,376 5,393 15,769
September 11,407 4,225 15,632
October 15,487 8,662 24,149
November 15,562 6,398 21,960
December 17,274 1,289 18,563

61
Disputes
Settlement
4. Enhance the Quality of Sales Value of Taxable Object
Within the scope of intensification, particularly in Land and Building Tax, in 2011 some
efforts were made to improve the quality of Sales Value of Taxable Object through:
a. improvement of software for Land and Building Tax input and valuation data in
Plantation sector in order to maintain good administration of Land and Building Tax
data;
b. establishment of forestry database system which will be used as a continuous
database starting from 2011 up to 2012 in order to maintain good administration
of Land and Building Tax data in Forestry sector;
c. implementation of Land Value Zone analysis for the most appropriate land
Assessment Sales Ratio (ASR), which means that the ratio of Land Sales Value of
Taxable Object set to market value that is close to the actual market value. ASR
to Land Sales Value of Taxable Object of 2011 was 86.7%, which means that
average implementation of Land Sales Value of Taxable Object was 86.7 % of the
market value of 2011;
d. adjustment of Building Sales Value of Taxable Object to market value (Building
ASR Analysis) in order to maintain the balance of Building Sales Value of Taxable
Object. ASR of Building Sales Value of Taxable Object of 2011 was 82.7%; hence,
average implementation of Building Sales Value of Taxable Object was 82.7%
compared to building market value of 2011; and
e. balancing of inter-regional Land Sales Value of Taxable Object to maintain the
accountability and fairness of Sales Value of Taxable Object implementation was
made through:
1) coordination of Sales Value of Taxable Object balance analysis in regions
which are located in the border of both inter-Small Taxpayer Offices and inter-
Regional Tax Offices; and
2) coordination of Sales Value of Taxable Object balance analysis of toll roads
and gas pipelines passing through inter-Small Taxpayer Offices and inter-
Regional Tax Offices.

62
2011
Annual Report
Our responsibility arises not only because of the duties and
roles, but also because of the concerns.

63
2011
Annual Report
Law
Enforcement
06
Audit, investigation, and collection are parts of law
enforcement, which are intended to give deterrent
effects towards taxpayers, hence taxpayers
compliance increased.

64
As a tax authority in Indonesia, DGT plays an important role in setting up taxation system
to optimize state revenue from taxation sector. In the long term, sound taxation system is
aimed at increasing taxpayers` voluntary compliance in fulfilling their tax obligations. As part
of the effort to attain such effective and high-quality taxation system, DGT continuously
makes efforts to improve its services, monitoring, and law enforcement activities.

65
Disputes
Settlement
Law enforcement activities carried out by DGT consist of three types, namely audit,
collection, and investigation. Those three activities basically aim to give deterrent effect to
taxpayers in order to attain the increase in taxpayers voluntary compliance as a long term
objective. In addition, the impact of law enforcement activities is a positive contribution to
tax revenue obtained from audit, collection of tax arrears, and investigation. To optimize law
enforcement activities and to avoid the possibility of disputes between taxpayers and DGT,
the law enforcement activity must be implemented measurably, objectively, consistently,
professionally, and systematically according to the prevailing laws and regulations.
A
Audit is a preliminary law enforcement act conducted by DGT. The definition of audit is a Audit
series of activities, i.e. collecting and processing data, information, and evidence, which
is carried out objectively and professionally based on audit standard to test compliance
in fulfilling tax obligation and for other purposes according to the prevailing laws and
regulations.
The objective of audit is to test compliance in the fulfillment of tax obligation and for other
purposes. Audit to test compliance aims to test the accuracy of Tax Returns. This audit
consists of special audit performed based on the result of risk analysis on taxpayers
profiles or based on the result of Information, Data, Report, and Denunciation (Informasi,
Data, Laporan, dan Pengaduan/IDLP) analysis which shows any indications of taxpayers
incompliance, and routine audit which is undertaken, among others, in the case of tax
refund request. Audit for this purpose produces Notice of Tax Assessment.
Meanwhile, audit for other purposes is not intended to issue Notice of Tax Assessment,
but to provide taxpayers with certain services, such as the elimination of Taxpayers
Identification Number for individual, confirmation and annulment of Taxable Entrepreneurs
for VAT Purposes, and fulfillment of information request from Tax Treaty partner countries.
In order to measure audit performance, DGT uses quantitative and qualitative approach.
By using quantitative approach, audit performance is measured based on the realization of
audit completion compared to audit completion target. The audit completion standard is
based on the audit of Annual Income Tax Returns for Corporate (all-taxes corporate audit)
as a reference. To calculate audit completion in 2011, other than all-taxes corporate audit
was converted so that it would be equally comparable to all-taxes corporate audit.
Audit performance using qualitative approach is measured by calculating the contribution

of audit activity (value of refund discrepancy added with revenue from audit) to total tax
revenue. Refund discrepancy is the difference between the amount of tax refund requested
by taxpayers and the actual amount of tax refund after audit. Meanwhile, tax revenue from
the audit is calculated from the payment of Notice of Tax Assessment within the period
prior to collection activity.

66
Audit Performance and Target

Audit Completion Target (Audit Report Converted) 39,644 Reports
Achievement 2011
Routine 28,220 Reports
Audit Completion (Audit Report Converted) 31,879 Reports
Special 3,659 Reports
Percentage of Target Achievement 80.41%
Revenue Target from Audit Rp9.00 trillion
Tax Revenue from Audit Rp11.11 trillion
Percentage of Revenue Target Achievement from Audit 123.44 %
Target of Audit Result and Refund Discrepancy to Tax Revenue 1%
Refund Discrepancy Rp4.80 trillion
Total Tax Revenue Rp669.65 trillion
Percentage of Tax Revenue from Audit and Refund Discrepancy 2.38%
80,000
Realization of Audit Completion and
Ratio of Number of Tax Auditors with
68,017 69,195
Total DGT Employees in 2007-2011 70,000
64,988 12.96%
61,351
12.70%
60,000
9.91%
50,000
9.52%
Audit Reports
40,000
7.13%
30,000
21,178
20,000
10,000
-
2007 2008 2009 2010 2011
Ratio of Number Auditor to Total DGT Employees
Number of Tax Auditors

Year 2007 2008 2009 2010 2011
in 2007-2011
Number of Tax Auditors 2.226 3.098 3.031 4.159* )
4.113*)
*) excluding Tax Investigators

67
Disputes
Settlement
Audit performance throughout 2011 was attained through the following efforts and
strategies.
a. Formulation and refinement of several audit regulations, for example:

1) tax audit plans and strategies;
2) tax audit procedures;
3) guidelines for audit implementation to test compliance in the fulfillment of tax
obligations; and
4) guidelines for the implementation of audit for other purposes.
b. Human resources capacity building related to audit techniques and methods is
carried out by planning Training Need Analysis (TNA), organizing and coordinating
capacity and competency building training activities for Tax Auditors in the forms
of:
1) Training on Auditor Certification (Basic, Intermediate, Advanced, and Expert
Functional Training);
2) In-house training (IHT) on Transactional Specialization Technical Skills;
3) IHT on Specific Business Sector Technical Skills;
4) IHT on Supporting Technical Skills;
5) Training of Trainers;
6) Workshops; and
7) Knowledge Base of Auditors Capacity and Competency.
c. Audit quality control through review of audit report and peer review on the audit
process.
d. Formulation and refinement of guidelines and procedures in conducting
comprehensive tax audit for various businesses and industries whose
characteristics are different with the following details:
1) IHT Module for Senior Auditor;
2) e-Auditor Technical Guidelines Module for Intermediate Level;
3) e-Auditor Technical Guidelines Module for Advance Level;
4) Audit Module for Minerals and Coal; and
5) Compilation of Regulations on Geothermal.
e. Development of audit support, such as:
1) refinement of Audit Management Information System to provide data and
information support related to audit activity; and
2) development and refinement of Risk-Based Audit Criteria Selection System
concept which can be used to analyze taxpayers data in accordance with the
required criteria.
f. Implementation of audit cooperation with the Financial and Development
Supervisory Board (Badan Pengawas Keuangan dan Pembangunan/BPKP) under
a State Revenue Optimization Team and audit cooperation in one platform, namely
Joint Audit Committee of DGT and Directorate General of Customs and Excise
(DGCE).
g. Implementation of audit cooperation in the forms of:
1) establishing the State Revenue Optimization Team, namely audit cooperation
with the Financial and Development Supervisory Board;
2) establishing Joint Audit Committee of DGT and DGCE in order to improve
synergy in audit, especially for taxpayers conducting export/import activities;
and
3) improving current cooperation with third parties and exploring possibilities for
cooperation with other third parties.

68
B Transfer Pricing Article 18 paragraph (3) of Income Tax Law provides the authority to the Director General
Audit of Taxes to adjust the amount of income, deduction, and debt as the base to calculate
the amount of Taxable Income for affiliated taxpayers in line to arm`s length principles.
Accordingly, DGT must ensure that transfer pricing is not used by taxpayers to avoid tax
(abuse of transfer pricing). Also, the method used, comparable selected, and transfer price
determined by taxpayers at the time of transactions with the related party, particularly
transactions done by multinational companies, are in accordance with the arms length
principle.
Transfer pricing mostly involves cross border transactions, hence cooperation with other
countries is deemed necessary, either in the form of tax treaty or Exchange of Information
(EoI).
In 2011, DGT organized several programs to secure tax revenue from the abuse of transfer
pricing, namely:
a. Issues of Transfer Pricing module, which consists of technical guidelines for audit
of transfer pricing transactions for Tax Auditors.
b. Human resources development for transfer pricing.
Transfer pricing training and dissemination of regulations is continuously provided
for DGT employees, particularly to Tax Auditors and Account Representatives, in
order to have sufficient understanding and skills in handling transfer pricing cases.
In 2011, Human Resources development in transfer pricing was done by
conducting workshops/IHT at several Regional Tax Offices, which often handle
transfer pricing cases, and organizing Transfer Pricing Training for Basic Level at
the Head Office and Training on Multinational Enterprises Audit.
c. Technical assistance to DGT operational units.
Technical assistance is provided to all units in the process of risk analysis by
Account Representatives, audit by Tax Auditors, objection at Regional Tax Offices,
and appeal at the Tax Court. Comparables data from the commercial database
is also provided in the technical assistance. In 2011, there were 48 technical
assistance activities that have been conducted.
According to Law Number 19 Year 2000 regarding Tax Collection with Coerce Warrant,
C Collection
definition of collection is an action in order for Tax Bearer to pay tax debt and tax receivable
collection cost by reprimanding or warning, undertaking collection immediately and all
at once, notifying Coerce Warrant, proposing restrain order, conducting confiscation,
confinement, and selling confiscated goods. DGT conduct tax collection through both soft
collection, by counseling or issuing reprimand letter, and hard collection, starting from the
issuance and notification of Coerce Warrant until the last attempt, confinement.
The basis for tax collection target takes into account the estimated ability of taxpayers/tax
bearers to pay their taxes, as described below.

69
Disputes
Settlement
a. Estimated collection of initial balance of tax receivable by considering the value

of liquid tax receivable, less liquid tax receivable, doubtful tax receivable and
tax receivable which needs special consideration and recognizing the amount
of allowance for uncollectible tax receivable based on Regulation of Minister
of Finance Number 201/PMK.06/2010 regarding the Quality of Receivable of
Ministries/Institutions and the Formulation of Allowance for Uncollectible Tax
Receivable.
b. Estimated collection of Tax Assessment issued in the current year based on the
average of tax receivable paid over 30 days or after the payment due date of Tax
Assessment issued in the current year for the last three years.
For the effectiveness of tax receivable collection, priorities are given to tax receivables that
meet certain conditions, which are:
a. due to expire;
b. included in the top 100 tax debtors at tax offices;
c. with the value of more than Rp10 billion per taxpayer/tax bearer;
d. whose taxpayers/tax bearers have high level of financial liquidity (have the ability to
pay) and have the willingness to pay or liquid tax receivable;
e. whose taxpayers/tax bearers have the ability to pay, but are not cooperative in the
payment of their tax receivable;
f. whose taxpayers/tax bearers are public figures;
g. whose taxpayers have indication of bankruptcy, are in the process of bankruptcy,
or have completed the process of bankruptcy;
h. whose taxpayers have indication of going to be liquidated, or in the process of
liquidation.

70
In 2011, DGT managed to collect tax receivable up to Rp12,240,956,578,940 as shown

in the table below.
(in rupiah)
Tax Receivable in 2011

Type of Tax Payment Ending Balance
Income Tax Article 25-Individual 128,824,098,466 1,011,913,424,154
Income Tax Article 25-Corporate 3.689,139,557,395 14,272,978,070,717
Income Tax Article 21 413,045,614,332 1,085,067,767,122
Income Tax Article 22 20,358.399,701 466,665,742,712
Income Tax Article 4 paragraph (2) 184,154,351,033 517,874,742,848
VAT 2,816,881,535,934 42,235,408,556,547
Sales Tax on Luxury Goods 41,992,489,535 208,754,851,900
Collection Interest 439,713,015,365 1,878,627,837,656
Other Indirect Tax 200,000 691,914,937
Land & Building Tax-Rural Sector 378,029,637,202 2,401,365,978,915
Land & Building Tax-Urban Sector 2,203,243,839,682 11,291,484,268,099
Land & Building Tax-Plantation Sector 447,288,717,461 394,209,918,227
Land & Building Tax-Forestry Sector 114,675,408,636 630,580,993,822
Land & Building Tax Non-Oil & Gas Mining Sector 243,430,781,222 327,209,691,938
Land & Building Tax Oil & Gas Mining Sector - 5,275,706,213,645
Total 12,240,956,578,940 86,801,366,456,349
Notes: - Audited by the Audit Board of the Republic of Indonesia (Badan Pemeriksa Keuangan/BPK)
- Tax Receivable in US$ had been converted to Indonesian Rupiah with rate Rp9,068/US$
D Investigation Tax criminal investigation is the ultimate law enforcement attempt (ultimum remedium)
by DGT according to the mandate of the laws. Investigation on tax crime is a series of
activities conducted by Tax Investigator to find and collect evidence in order to uncover a
criminal offence in the field of taxation and find the suspect. Tax Investigator is DGT official
who is granted with special authority to carry out tax criminal investigation according to the
prevailing laws and regulations.
The investigation process begins with the development and analysis of information, data,
report, and denunciation. If strong indication of tax crime found, it will be followed by
proposal for verification of preliminary evidence. Should the preliminary evidence of tax
crime revealed, it will be followed by proposal for investigation.
In 2011, DGT finalized 389 verifications of preliminary evidence and 49 of them were
proposed to be elevated to investigation. Issuance of illicit Tax Invoice which refers to
Article 39A of Law on General Provisions and Tax Procedures is the dominant (65%) modus
operandi of tax crime proposed to be elevated to investigation, followed by embezzlement
by 17% which refers to Article 39 of Law on General Provisions and Tax Procedures.

71
Disputes
Settlement
All the modus operandi of tax crime proposed to be elevated to investigation can be
illustrated as shown below.
Modus Operandi for Investigation

Proposals in 2011
32
13
4
Issuance Tax Invoice not based on actual transactions
Submission Incorrect or Incomplete Tax Return
Withholding but did not pay the tax withheld
In 2011, there were 118 investigation cases undertaken. Out of that number, 27 cases
were already submitted to the Attorney Office, which consist of 24 cases considered
complete (P-21 status) and 3 cases considered incomplete (P-19 status). There were 15
cases with 14 defendants put in trial and convicted by court.

72
Investigation Performance
2007 2011
No. Description 2007 2008 2009 2010 2011
I Investigation Submitted to Attorney Office
A. P-19 Status*) 0 24 19 14 3
Amount of State Loss (billion rupiah) 0 1,412 162 233 5
Number of Suspects 0 13 16 12 6
B. P-21 Status**) 17 11 24 19 24
Amount of State Loss (billion rupiah) 514 131 329 509 169
Number of Suspects 21 11 18 16 18
II Cases Convicted
Cases Convicted 8 13 18 13 15
Amount of State Loss (billion rupiah) 100 463 288 409 58
Fines (billion rupiah) 6.8 115 633 301 42
Number of Defendants 9 17 14 11 14
Note: Data as of 31 December 2011

*) dossiers need completion
**) dossiers are complete and can be forwarded to prosecution stage
Several factors supporting the success of investigation are, among others:
a. accuracy of information, data, report, and denunciation development and analysis

which is followed by verification of preliminary evidence; and
b. coordination in the case preparation and exposure so that investigation can
proceed to lawsuit (P-21 status).
To strengthen investigation activities, throughout 2011 DGT conducted some cooperation

and coordination with other institutions, namely:
a. the Indonesian National Police, in the forms of:

1) coordination in arresting and detaining activities, security support in the search
and warrant activities, and protecting in taking the witnesses and suspects;
2) joint case exposure on tax crime;
3) providing resource person in Intelligence and Investigation National
Coordination Meeting and Workshop on Money Laundering Crime conducted
by DGT;
4) Analysis and Evaluation Meetings, Coordination and Monitoring Meetings of
Civil Servant Investigators, and Investigation Coordination Meetings; and
5) delivering briefings about the handling of tax crime, Jakarta Centre for Law
Enforcement Cooperation (JCLEC) Program, and Training for Improvement of
Investigator of Corruption Crime.

73
Disputes
Settlement
b. the Attorney Office, in the forms of:

1) coordination in restraining defendants from travelling abroad;
2) coordination in the finalization of investigation cases of tax crime; and
3) providing resource person in Intelligence and Investigation National
Coordination Meeting conducted by DGT.
c. the Indonesian Financial Transaction Reports and Analysis Center/INTRAC (Pusat

Pelaporan dan Analisis Transaksi Keuangan/PPATK), in the forms of:
1) meeting to discuss the Presidential Regulation Draft on the implementation
of Law Number 8 Year 2010 regarding Prevention and Eradication of Money
Laundering Crime;
2) meeting to discuss the Presidential Regulation Draft on the Procedures of the
Execution of INTRAC Authority;
3) meeting to discuss the Joint Training on the Handling of Money Laundering
Criminal Case and the Formulation of Joint Training Module on the Handling of
Money Laundering Criminal Case; and
4) follow up on the Memorandum of Understanding on the Cooperation in the
Prevention and Eradication of Money Laundering Crime and Tax Crime.
d. Banking Institutions, in the forms of:

1) cooperation in the verification of substantive law, through the willingness
of banks to disclose a bank account and to provide taxpayers data or
transaction; and
2) providing resource person in the workshops and national management
meetings of the Directorate of Intelligence and Investigation.
e. Ministry of Law and Human Rights, in the forms of:

1) inauguration and appointment of all Civil Servant Investigators at DGT;
2) providing identification card to all Civil Servant Investigators; and
3) providing resource person concerning scope of law in the in the workshops
and national management meetings of the Directorate of Intelligence and
Investigation.

74
2011
Annual Report
The difference is a natural thing. How to harmonize the differences
for the interest of the nation is our shared responsibility.

75
2011
Annual Report
Disputes
Settlement
07
DGT constantly performs its duties and functions
according to the government regulation. However,
there are still possibilities of disputes or cases from
interpretation and implementation of the substances
the government regulations. Dispute settlement is
required to ensure law certainty for the taxpayers.

76
A Tax Disputes Tax disputes settlement is a vital issue that becomes the attention of DGT in its effort to
Settlement provide legal justice and certainty for taxpayers. In settling tax disputes, DGT guarantees
the taxpayers rights so that they can use their rights in going through processes of certain
services. The processes can be found at several institutions, namely it can be settled
at DGT or at the Tax Court and the Supreme Court. Processes settled at DGT consist
of processes of tax objection, correction, reduction, elimination, and cancellation of tax
stipulation. Processes settled outside the DGT are appeal and lawsuit processes which are
settled at the Tax Court and review process which must be requested by taxpayers or DGT
to the Supreme Court through the Tax Court.

77
Disputes
Settlement
1. Objection, Correction, Reduction, Annulment, and Cancellation
Legal attempts that can be taken by taxpayers if they disagree with any tax assessment
are:
a. objection over Notice of Tax Underpayment Assessment (SKPKB), Notice of

Additional Tax Underpayment Assessment (SKPKBT), Notice of Nil Tax Assessment
(SKPN), Notice of Overpayment Assessment (SKPLB), Notice of Land and
Building Tax Payable (SPPT), Notice of Tax Assessment of Land and Building Tax
(SKP PBB), Notice on Acquisition Duty of Right on Land and Building Assessment
Underpayment (SKBKB), Notice on Additional Acquisition Duty of Right on Land
and Building Assessment Underpayment (SKBKBT), Notice on Acquisition Duty
of Right on Land and Building Assessment Overpayment (SKBLB), Notice of
Nil Acquisition Duty of Right on Land and Building Assessment (SKBN), other
withholding tax by a third party;
b. correction of Notice of Tax Assessment (skp), Notice of Tax Collection (SPT), and
decrees for any mistyping, miscalculations, and mistakenly applied provisions of
tax laws and regulations;
c. reduction or annulment of administrative penalties either due to the negligence of
taxpayers or not;
d. reduction or cancellation of incorrect Notice of Tax Assessment;
e. reduction or cancellation of incorrect Notice of Tax Collection;
f. reduction of administrative penalty for Land and Building Tax;
g. reduction of Land and Building Tax and Acquisition Duty of Right on Land and
Building payable; and
h. cancellation of tax audit result or notice of tax assessment evaluation without
notice of audit result or final discussion of audit results with taxpayers.
Performance of the settlement of objection, correction, reduction, elimination, and

cancellation of tax assessment in 2011 is as shown in the following table.
Dispute Settlement in 2011
Acquisition
VAT/Sales Land &
Income Duty of Right Total
Type of Settlement Tax on Luxury Building
Tax on Land and
Goods Tax
Building
Objection 3,525 6,242 6,358 5 16,130
Correction 751 658 3,239 1 4,649
Basic Tax Deduction - - 26,561 44 26,605
Deduction or Annulment of Administrative Penalties 5,562 7,338 2,203 3 15,106
Deduction or Cancellation of Tax Assessment 1,312 1,719 7,985 2 11,018
Deduction or Cancellation of Notice of Tax Collection 948 1,143 0 4 2,095
Cancellation of Audit Result/Notice of Tax Assessment as a Result of Audit 5 29 0 0 34
Total 12,103 17,129 46,346 59 75,637
In order to monitor and to improve the services and quality of completion result of
objection, correction, deduction or annulment of administrative penalties, and reduction
or cancellation of tax assessment, in 2011 the DGT Head Office through the Directorate of
Objection and Appeal conducted Peer Review to Regional Tax Offices.

78
2. Appeal and Lawsuit to the Tax Court
The right to request for appeal to the Tax Court can be used if taxpayers disagree or
dissatisfied with any objection decisions issued by the DGT. The right to file lawsuit to the
Tax Court can be used by taxpayers or taxbearers who disagree or are dissatisfied on:
a. execution of Coerce Warrant, Notice of Seizure, or Notice of Auction;

b. restrain order decision in the frame work of tax collection;
c. decision that relate to the execution of tax assessment, other than those stipulated
to in Article 25 paragraph (1) and Article 26 of Law on General Provisions and Tax
Procedures; or
d. issuance of Notice tax assessment or Decision of Objection not in accordance
with the procedures stipulated in tax laws.
Filing of appeal or lawsuit to the Tax Court that has been decided by the Panel of Judges
and whose verdict has been accepted by DGT throughout 2011 is 3,202 verdicts.
Appeal and Lawsuit Verdicts

Decision Appeal Lawsuit Total
for each Letters of Verdict Accepted
Rejected 473 282 755
by DGT in 2011
Partially Granted 668 18 686
Fully Granted 719 126 845
Cancelled 18 33 51
Unaccepted 358 414 772
Added 2 0 2
Total 2,238 873 3,111
Corrected due to Errors in Writing 83 8 91
and/or Calculation
Notes: Corrected due to Errors in Writing and/or Calculation is a verdict

which revised previous verdict.
Letters of Verdict, namely Rejected, Unaccepted, and Added, show that DGT has won
either in the appeal or lawsuit. Hence, out of 2,238 appeal Letters of Verdict, 37.22% was
won by DGT. While out of 873 lawsuit Letters of Verdict, 79.73% was won by DGT.

79
Disputes
Settlement
3. Review to the Supreme Court
Verdicts over appeal or lawsuit from the Tax Court are the final verdicts and legally binding.
However, all parties, both taxpayers and DGT, still have the rights to take an extraordinary
legal attempt, Review to the Supreme Court. Review can be filed within a period of three
months at the latest since the verdicts are sent by the Tax Court. Taxpayers or DGT may
submit Review on appeal or lawsuit verdicts by the Tax Court for the following reasons:
a. the Tax Court verdicts are based on falsity or deceit of the opposite party which
reveals after the cases have been decided or based on evidence which at a later
time was declared as false by the criminal judges;
b. there are new written proofs which are vital and prescriptive, that if found out at the
time of trial at the Tax Court would result in different verdicts; and
c. some issues that were not charged or more than what have been charged have
been granted, unless what have been decided under Article 80 paragraph (1)
letters b and c of Tax Court Law;
d. concerning a part of the lawsuit which is yet to be decided without being given
duly considerations; or
e. there is a verdict which is clearly not in accordance with the provisions of the
prevailing laws and regulations.

80
Filing of Review to the Supreme Court by DGT is done through Memory of Review. Upon
the Review to the Supreme Court filed by taxpayers, DGT is obliged to reply in the form of
Counter Memory of Review. During 2011, DGT submitted 938 files for Memory of Review
and 340 files for Counter Memory of Review, with details as follows:
Filing of Review and Counter Review Counter

Memory
Type of Tax Memory of Total
to the Supreme Court in 2011 Review
Review
Income Tax 453 121 574
VAT/Sales Tax on Luxury Goods 477 215 692
Land & Building Tax/Acquistion 8 4 12
Duty of Right on Land & Building
Total 938 340 1,278
In 2011, DGT received 372 Verdicts of Review from the Supreme Court. Distribution of
Verdicts of Review from the Supreme Court based on the places of origin of the applications
and types of letter of verdict can be detailed as follows.
Verdicts of Review from

Applicant Rejected Granted Total
the Supreme Court in 2011
DGT 169 2 171
Taxpayer 195 6 201
Total 364 8 372
B Case Handling in In performing its duties and functions, DGT can issue and propose provisions related to
Courts other than the implementation of tax obligations and law products binding the public in general or
Tax Court taxpayers in particular. Although DGT always performs its duties and functions according
to the provisions of laws and regulations, there is always a possibility for disputes to occur
on the substances of the implementation or interpretation of those provisions. DGT as a
public institution and as a government representative can be charged by other parties
which filed to the judicative institutions other than the Tax Court, namely the District Court,
the State Administration Court, the Commercial Court, the Supreme Court, and the
Constitutional Court.
Cases frequently handled by DGT are concerning disputes over possession/utilization

of DGT asset, issuance of Notice of Tax Assessment of Land and Building Tax, default
lawsuit, personnel disputes, issuance of Notice of Tax Assessment, tax collection including
seizure and blockading, issuance of Warrant for Initial Evidence Verification/Investigation,
and bankruptcy. Cases handled based on the provisions of laws that have been charged
and defended by DGT are General Provisions and Tax Procedures, Income Tax, Land and
Building Tax, and Stamp Duty.

81
Disputes
Settlement
Scope of legal assistance provided by DGT in handling of the above cases is as follows:
a. handling of judicial review at the Constitutional Court and the Supreme Court;
b. handling of cases at court other than the Tax Court, arbitrary institutions, or other
institutions, in addition to conducting other acts related to the case handling;
c. provide legal opinions related to the duties and functions of DGT;
d. assistance in bringing Experts and Witnesses into presence; and
e. attachment to DGT employees or retired employees who are asked for their
statements, not only as witnesses, but also as experts or other statements from
the authorized parties.
Cases Handled by the Judicative

Court Total
Institutions other than the
District Court/Commercial Court 45
Tax Court in 2011
State Administrative Court 13
Supreme Court/Constitutional Court 4
Total 62

82 We are confident that the service and education that we provide with
2011 ethics and full responsibility will build public sympathy and inspire their
awareness towards tax obligation.
Annual Report

83
2011
Annual Report
Services,
Dissemination, and
Public Relations
08
Taxpayers compliance in fulfilling its tax obligation
is mainly affected by the tax services quality
and taxpayers understanding of their rights and
obligations. DGT continuously improve the tax
services quality, at the same time, DGT also educate
the society through dissemination and public relation
activities.

84
A Services The essence of bureaucracy reform within the Ministry of Finance is to provide better
and continuously improved public services in line with public expectation. Based on the
outcomes of Stakeholders Opinion Survey on the Services of the Ministry of Finance in
2011 undertaken by Bogor Agricultural University (IPB) and the Ministry of Finance, there
are several prioritized service elements to be improved by DGT, namely time of completion,
procedural compliance, officers skills, and information of requirements.
In accordance with the above survey result, in 2011 DGT undertook several improvements
in tax services, such as:
a. refinement of excellent service guidelines to create service mindset;

b. development of information and communication technology based on tax services,
such as online Tax Return filing (e-filing), web-based services (www.pajak.go.id) to
download tax forms and other tax information, and information and complaint
service through Kring Pajak 500200; and
c. monitoring and evaluation of the convening of sixteen Quick Wins in services to
ensure time certainty in service completion.

85
Disputes
Settlement
DGT Quick Wins in Services
1. Settlement for the Request of Taxpayer Identification Number Registration

2. Settlement for Request of Confirmation as a of Taxable Person for VAT Purposes
3. Settlement for Request of VAT Refund
4. Settlement for Disbursement of Refund Claim
5. Settlement for Objection of Income Tax, VAT and Sales Tax on Luxury Goods
6. Settlement for Request of Exemption to Income Tax for Article 22 (Import Tax) Written Permit
7. Settlement for Request of Land and Building Tax Deduction
8. Settlement for Registration of New Tax Object with Office Research
9. Settlement for the Fully Complete Transfer of Land and Building Tax Objects and Subjects
10. Settlement for the Request of Notice on Tax Exemption for Deduction of Income Tax Article 23
11. Settlement for Request of Notice on Tax Exemption for Deduction of Income Tax on Time Deposit, Savings
and Indonesian Central Bank Discount Interest Received or Earned by the Pension Fund whose Establishment has
been Legitimated by the Minister of Finance
12. Settlement Request of Notice on Tax Exemption for Income Tax on Income from Transfer of Right over Land and /
or Building
13. Settlement for Request of Notice on Tax Exemption for VAT on Certain Taxable Goods
14. Settlement Request of Land and Building Tax Objection
15. Settlement for Request of Reduction or Elimination of Administrative Sanctions
16. Settlement for the Completion of Request for Reduction or Cancellation of Inappropriate Tax Provision
1. Development of Service Mindset
Based on the information and data received from the public through various DGT complaint
channels, there are still direct and indirect public complaints on DGT officers services.
Hence, DGT feels necessary to improve its service quality and highly realizes that reform
in services must start from the most fundamental aspect, namely mindset, attitudes, and
words in communicating. All those aspects need to be shaped to create service mindset
in every employee of DGT.
Service mindset development plays an important role in materializing excellent services.

One of the efforts taken by DGT in development of the service mindset is by issuing the
Circular Letter of the Director General of Taxes Number SE-84/PJ/2011 dated 15 November
2011. The Circular Letter underlines the importance of support and commitment from
the entire board of management of each unit at DGT (Head Office, Regional Tax Offices,
Tax Offices, up to Tax Services, Counseling, and Consultation Offices) in order to provide
excellent services. Principal issues that must be carried out by each unit/employee are also
regulated under that Circular Letter, such as:
a. special attention must be given to the DGT Head Office with regard to policies
stipulated to support the service improvement at tax offices;
b. Regional Tax Offices must continuously conduct counseling, development,
monitoring, and evaluation to the efforts of improvement of employees competency,
facilities and infrastructure, and education to the public in tax services;

86
c. Tax Offices and Tax Services, Counseling, and Consultation Offices must undertake
service to taxpayers according to the guidelines in:
1) behaving and dressed properly when meeting taxpayers;
2) arranging the office interior to maintain the convenience and safety of
taxpayers and DGT employees;
3) improving service time arrangement, by considering the time needed for
preparation and evaluation of services on the particular day; and
4) arranging time schedule for officers on duty so that even during break time,
services can still be provided.
2. Development of Tax Service Features
a. e-Filing
Starting from 2011, DGT has developed a convenience facility for individual taxpayers
to file Annual Income Tax Returns online through DGT website (www.pajak.go.id), as an
alternative of using the Application Service Provider (ASP).
Filing of Tax Returns through e-filing on DGT website will allow taxpayers to avoid queuing
at the Drop Box. In addition, it will be easier for DGT to process the Annual Tax Returns,
since the reception and processing of Annual Tax Returns will be more practical, less
expensive, and faster.
b. VAT Refund for Tourists Service
VAT Refund upon foreign passport holders baggage or better known as VAT Refund for
Tourists, which has started in Indonesia since 2010, experienced additional service points
and merchants participating in VAT Refund for Tourists scheme.
To broaden the service points of VAT Refund for Tourists, it is necessary to add service
points at the airports besides Soekarno Hatta Airport of Jakarta, Ngurah Rai Airport of Bali,
and Adisutjipto Airport of Yogyakarta. Based on the data from the Statistics Indonesia for
2010, East Java and North Sumatera Provinces have quite significant number of tourists.
In addition, the Ministry of Transportation has decided Juanda Airport of Surabaya and
Polonia Airport of Medan to become international airports which allow direct flights from
and to overseas, hence the DGT must expand and prioritize its tax service in those areas.
Starting from 1 September 2011 Juanda Airport of Surabaya and Polonia Airport of Medan
were decided to become service points for VAT Refund for Tourists by the Decree of the
Minister of Finance Number 287/KMK.03/2011. In conjunction with the opening of the new
service points of VAT Refund for Tourists the Director General of Taxes by the Decree of the
Director General of Taxes Number KEP-156/PJ/2011 appointed 5 merchants in East Java
and 4 merchants in North Sumatera as the participating merchants in the VAT Refund for
Tourists program, in addition to the 20 merchants in Jakarta, 10 merchants in Bali, and 10
merchants in Yogyakarta which have previously been appointed.

87
Disputes
Settlement
The expansion of VAT Refund for Tourists service points as the exit points for foreign
tourists and the addition of participating merchants are expected to increase service value
as point of attraction for foreign tourists to visit Indonesia and to accelerate the growth of
domestic trade.
3. Kring Pajak 500200 Service
Starting from an aspiration to build a clean government, since 2008 DGT has operated
a contact center entitled Kring Pajak 500200. This contact center can be contacted by
the public through the telephone line number 500200 and generally performs 2 functions,
namely Information Service Center and Tax Complaint Center.
As an Information Service Center, Kring Pajak 500200 performs the function as the provider
of information service, general tax counseling, and electronic tax application counseling.
The service is provided by officers that have been intensively trained so that they have
sufficient communication skills and knowledge on taxes and electronic tax applications.
DGT Complaint Service Line
Phone (021) 500200
Facsimile (021) 5251245
Mail Complaints Management Unit
(DGT Head Office, Regional Tax
Office, Tax Office, Tax Services,
Counseling & Consultation Office)
e-Mail pengaduan@pajak.go.id

88
Performance of Information Service of

Month In-coming Calls Calls Answered % Answered
Kring Pajak 500200 in 2011
January 40,183 35,479 88
February 44,880 26,343 59
March 56,043 44,982 80
April 33,683 29,671 88
May 26,639 21,901 82
June 24,089 20,195 84
July 26,701 22,159 83
August 26,406 23,401 89
September 26,197 20,678 79
October 31,626 25,226 80
November 30,953 24,160 78
December 32,469 26,085 80
Total 399,868 320,280 80
To provide excellent information service to the public, Kring Pajak 500200 officers are
supported and equipped with Tax Knowledge Base (TKB) software which is always updated
with the changes in tax regulations. TKB software is information source for contact center
agents in attending to requests for information and answering tax inquiries.
As Complaint Service Center, Kring Pajak 500200 performs the function of reception and
management of complaints from the public. Types of complaint handled consist of violation
allegation related to code of ethics, multi-interpretation over tax regulations, services and
service facilities which do not meet standards. To support service management of various
kinds of complaint, various complaint lines are also made available, such as mail, facsimile,
e-mail, telephone, and walk-in (on-site complaint).
To guarantee service quality, SOP of Kring Pajak 500200 ensures that all complaints
received by agents are recorded in Tax Complaint Information System. This system is
refined continuously to guarantee service quality where complaints can be traced for the
progress and supporting information so that all evidence/data received for further process
are accountable. In addition, the confidentiality of the reporting party is also secured in
accordance with the prevailing regulations.

89
Disputes
Settlement
Number of Complaints Received by

Type of Complaints 2010 2011
Kring Pajak 500200 for 2010-2011
Code of Ethics and Discipline 70 58
Tax Regulation 69 5
Number of office facilities inadequate 40 63
Service inadequate 826 709
Tax criminal offense 336 201
Total 1,341 1,036
Source: Tax Complaint Information System
In addition to reflect the DGT service to the public, the high number of complaints is one
of success indicator that the complaint line is publicly informed and public concern of DGT
services is increased. DGT positively responds to complaints by continuously improving
the quality of public services and encouraging public participation in monitoring the
implementation of public services.
In 2011, dissemination activity was still conducted through routine activities, such as
dissemination to treasurers and dissemination of Annual Tax Return, and dissemination
Dissemination
B
of the implementation of National Tax Census. In terms of quantity, there were 16,078
dissemination activities conducted in 2011 or 100.4% of the total activities planned.
Dissemination activities done in 2011 are as follows:
a. Direct dissemination to the public, individual taxpayers, business associations,

government treasurers, and taxpayers-to-be, for example school and university
students, who pay a visit to the tax offices or at schools/universities.
b. Indirect dissemination through radio and national television stations, booklets,
leaflets with various taxes themes.
c. Preparation and procurement of dissemination facilities, for example tax books,
such as Bendahara Mahir Pajak (Treasurer Proficient in Taxation) and Oasis
Pemotongan/Pemungutan PPh (Income Tax Withholding).
d. Dissemination of National Tax Census program which began before and continued
after the program launching to ensure the continuity of the program until the end of
the year.
In addition to operational activities as mentioned above, in 2011 DGT also carried out
monitoring and evaluation on the effectiveness of dissemination in the form of survey,
which did not receive adequate attention in the previous years. The survey, which was
independently conducted by DGT, gave the illustration on the gap between public
expectation on the dissemination provided by DGT and the realization especially from
direct dissemination. The public, were already aware about general tax knowledge, but
they still need dissemination to understand how to thoroughly fulfill their tax obligations.
The survey also informs that dissemination needs to focus on direct dissemination, such
as dissemination by Account Representative, seminar, and workshop. It does not mean
that dissemination activities through other channels should be eliminated, they still need
to be maintained. Direct dissemination shows the largest gap between public expectation
and the result.

90
DGT also set the year 2012 as the year of dissemination consolidation which was marked
with the formulation of dissemination policy with regard to the preparation of work plan and
reporting of the implementation of dissemination activities as stipulated under the Circular
Letter of the Director General of Taxes Number SE-98/PJ/2011 dated 29 December 2011.
In the new policy, dissemination focuses on taxpayers-to-be, new taxpayers, and registered
taxpayers. This policy is expected to have the implementation of the dissemination activity
be carefully planned, to have clear directions, and to have measurable effectiveness for
each dissemination focus.
In 2011, DGT also prepared policy on the establishment of Tax Dissemination Team
together with Group of Counselors at the operational units as stipulated under the Circular
Letter of the Director General of Taxes Number SE-98/PJ/2011 dated 29 December 2011.
The establishment of Tax Dissemination Team and the Group of Counselors is needed to
obtain clarity related to the implementation of dissemination and to clarify the targets of
personnel capacity building as tax counselor.
There are 3 objectives of DGT public relations, namely: (i) to increase public awareness
C Public
Relations and understanding on the importance of tax for nation development (awareness level); (ii)
to build public trust in DGT as an institution which runs tax administration system (attitudes
and opinions level); and (iii) to encourage taxpayers to fulfill their tax obligations based on
the principle of self assessment (behavior level).
During 2011, public relations activities carried out by DGT consist of:
a. DGT public service ads on the printed media, electronic media (television and
radio), online media, and outdoor media (cinemas, trains, and airport billboards);
b. convening of dialogues, academic discussions, and national seminars by inviting
various public figures and other mass media figures;
c. establishment of tax center in various universities/colleges in Indonesia (83 tax
centers by the end of 2011);
d. publication of DGT employees opinions in various newspapers;
e. receiving foreign delegations and university/school students visit;
f. dissemination of tax information to internal and external parties through electronic
media (e-Magazine) and online media (www.pajak.go.id);
g. implementation of various cooperation activities with journalists, such as opening
of tax classes/training for journalists, inviting for media tour, and convening of talk
show and press conference; and
h. issuance of press releases for the dissemination on policy, performance, and
activities of DGT, and confirmation of reportage/news.
List of Press Releases in 2011
Date Title of Press Release
6 January Realization of Tax Revenue for 2010

Reduction Tariff of Income Tax Article 21 on Income Sourcing from the State or Local
State Budget
19 January Taxpayers at the Level of Income Tax Free/Reduction Investment
20 January Tax Intelligent and Investigation Policy
3 March Tax Policy Package for the Month of February 2011
8 March Dissemination of Simultaneous Completion of Annual Income Tax Returns for Individual

91
Disputes
Settlement
Date Title of Press Release
17 March Entrepreneurs Manipulating Tax Sentenced for 2 Years and Fined for 1 Billion Rupiahs
18 March Filing of Annual Income Tax Returns for Individual by the President of RI, Vice President of RI,
Chairmen of State High Institution, and Ministers
6 April DGT Organizes Blood Donation Action
6 April DGT Supports Sports Development
28 April Deadline for Filing of 2010 Annual Income Tax Returns for Corporate
11 July DGT Captures the Mastermind behind Fictitious Tax Invoices
14 July VAT Treatment over Air Transportation and Telecommunication Services in the Free Trade Area
23 August DGT Investigates Company in Bandung
6 September VAT Tax Refund Service for Foreign Tourists in Medan and Surabaya
8 September Providing of Corporate Income Tax Exemption or Reduction Facility for Pioneer Industries
30 September Launching of National Tax Census
7 October Sindu Malik is not a DGT Employee
19 October DGT Established Cooperation with the Indonesian Financial Transaction Reports and Analysis
Center (INTRAC) in the Prevention of Money Laundering and Tax Crime
7 November Explanation from DGT with regard to Allegation of Violation in Goods and Services Procurement
11 November DGT and the Government Goods/Services Procurement Policy Institution (LKPP) Established Data
Exchange Cooperation
12 November DGT Effort to Prevent Expired Tax Receivables
15 November DGT Will Follow Up Coal Taxpayers Data
18 November DGT Refines its Tax Administration System
23 November Follow Up Action on the Audit Board of the Republic of Indonesia (BPK) on the Incompliance of
Treasurer
25 November DGT Always Utilizes Indonesian Wealthiest People Data
29 November User of Fictitious Invoices Sentenced for 4 Years
30 November DGT Responses on the Case of Tax Manipulation of Rp 1 Trillion
6 December DGT Commemorates World Anti Corruption Day
8 December Corruption Eradication Commission: Integrity of DGT is High
15 December DGT Makes Various Efforts to Attain Tax Revenue Target
16 December DGT Determined Agencies/Institutions as Recipients of Alms or Religious Donation
19 December Tax Payment Service at the End of 2011
21 December DGT Opened Complaint Services for Taxpayers
Request for Judicial Review of Government Regulation on Cost Recovery Declined by the
Supreme Court
23 December DGT Cooperates with the Indonesian Accountant Institute (Ikatan Akuntan Indonesia/IAI) to
Improve Tax Compliance
Taxpayers Facing Financial Difficulties May Request for Installment or Postponement of Land
and Building Tax
27 December DGT Encourages the Participation of Mothers in Tax Dissemintation
Taxpayers Are Obliged to Submit Periodic VAT Returns in the Form of Electronic Data
Additional Explanation related to Taxpayers Being Able to Request for Installment or
Postponement of Land and Building Tax
28 December DGT Launched the Rules on VAT Mechanism for the Delivery of LPG 3 Kg
DGT Launched Tax Holiday Implementation Regulations
29 December Annual Income Tax Returns for Employees Can Be Filed through Tax Website (e-Filing)

92
2011
Annual Report
Our responsibility in fostering partnerships is built by trust and
mutual respect.

93
2011
Annual Report
DGT in
International
Relations
09
DGTs participation and contribution in various
international activities are expected to bring benefits
in Indonesias financial area. Moreover, DGT
cooperates with foreign tax institutions in order to
obtain the latest information and international best
practices in tax administration.

94
A Tax Treaty In general, there are six stages for the establishment or renegotiation of Tax Treaty
Agreement and Agreement and Tax Information Exchange Agreement (TIEA) until they come into effect.
Exchange of
Tax Information First is the exploration phase. At this stage, one of the countries that have initiated or
planned to revise Tax Treaty Agreement/TIEA can propose an informal meeting, among
others, through diplomatic channel. In this regard, the competent authority will usually
carry out initial contact either through the Ministry of Foreign Affairs or directly with the
competent authority of the partner country to schedule the informal meeting. This informal
meeting is intended to smoothen the negotiation/renegotiation process afterwards.
Secondly is the negotiation phase. At this phase, all delegations of the two countries
undertake negotiation discussing the content of Tax Treaty Agreement/TIEA until they
reach an agreement. Several negotiations can be held to produce a mutual agreement on
the Clauses of the Tax Treaty Agreement/TIEA.
The third phase is putting initials on the draft if all delegations have agreed and there are
no pending issues. At this phase, the head of delegation of the two countries will put their
initials on each page of the content of Tax Treaty Agreement/TIEA which they have agreed
(clean draft).

95
Disputes
Settlement
Fourth is the signing phase. The clean draft above with initials will be then proposed for
signing. Based on the Law Number 24 Year 2000 regarding International Agreement, an
international agreement can only be signed by the President or the Minister of Foreign
Affairs or the representative of the Government of the Republic of Indonesia through a
Power of Attorney (full powers).
The fifth phase is ratification. At this phase, the signed Tax Treaty will bind the two countries,
but cannot come into effect unless Tax Treaty Agreement/TIEA has been ratified through
the issuance of Law or Presidential Regulation.
The final phase is the implementation. The new Tax Treaty Agreement/TIEA will only come
into effect upon exchange of ratification instruments between both countries.
1. Formulation of Tax Treaty
Several negotiations of tax treaty with partner countries which took place in 2011 are:
a. the second round Indonesia Lao Tax Treaty Negotiation, held in Bali on 9 10
February 2011;
b. the second round of Indonesia India Tax Treaty Renegotiation, held in New Delhi,
India, 28 29 April 2011;
c. Indonesia the Netherlands Tax Treaty Negotiation in relation with the Amendment
Protocol, held in London on 28 29 May 2011;
d. negotiation on the possibility of Indonesia Australia Tax Treaty renegotiation
(Informal Meeting), held in Jakarta, 7 9 September 2011;
e. renegotiation of Indonesia South Korea Tax Treaty, held in Seoul, South Korea,
28 30 September 2011;
f. Indonesia Malaysia Tax Treaty renegotiation related to the Article on Exchange of
Information which was done through correspendence and put initials in Paris on
19 September 2011 and signed in Lombok on 20 October 2011;
g. the first round of Indonesia Germany Tax Treaty renegotiation, held in Jakarta on
12 16 December 2011.
In 2011, DGT also proposed the ratification of Tax Treaty through the formulation of
Presidential Regulations on Tax Treaty with the following countries:
a. Zimbabwe, for Tax Treaty signed on 30 May 2001;

b. Croatia, for Tax Treaty signed on 15 February 2002;
c. Suriname, for Tax Treaty signed on 14 October 2003;
d. Armenia, for Tax Treaty signed on 13 October 2005;
e. Morocco, for Tax Treaty signed on 8 June 2008;
f. Papua New Guinea, for Tax Treaty signed on 12 March 2010;
g. Hong Kong, for Tax Treaty signed on 23 March 2010; and
h. Serbia, for Tax Treaty signed on 28 February 2011.
Meanwhile, Indonesia Lao and Indonesia Tajikistan Tax Treaties negotiation processes
have been concluded, but in 2011 the ratification was not yet proposed.
Up to the end of 2011, Indonesia has already had 60 Tax Treaties with partner countries
that have come into effect.

96
2. Implementation of Mutual Agreement Procedure
The implementation of Mutual Agreement Procedure (MAP) between DGT and Tax Treaty
partner countries undertaken in 2011 was:
a. Implementation of MAP with the Internal Revenue Service of the United States on
5 7 July 2011 in Washington DC, USA;
b. Implementation of MAP with the National Tax Service of South Korea on 27
September 2011 in Seoul, South Korea;
c. Implementation of MAP with the National Tax Agency of Japan, on 30 November
1 December 2011 in Jakarta; and
d. Implementation of MAP with the National Tax Service of South Korea on 22 23
December 2011 in Jakarta.
3. Formulation of Tax Information Exchange Agreement (TIEA)
To establish TIEA with non-tax treaty partner countries which are categorized by OECD
(Organization Economic Co-operation and Development) as cooperative jurisdictions, in
2011 DGT played a role in the signing of TIEA between Indonesia and several countries/
jurisdictions, namely:
a. Jersey, signed at the Office of the Ministry of Guernsey on 27 April 2011;

b. Guernsey, signed at the Office of the Ministry of Guernsey on 27 April 2011;
c. Isle of Man, signed at the Embassy of the Republic of Indonesia in London on 22
June 2011; and
d. Bermuda, signed at the Embassy of the Republic of Indonesia in London on 22
June 2011.
DGT has also submitted the ratification process on the above four TIEAs within the same
year.
Meanwhile, TIEAs that are still in the signing process up to the end of 2011 are:
a. TIEA Indonesia Costa Rica;

b. TIEA Indonesia Cayman Islands;
c. TIEA Indonesia Bahama; and
d. TIEA Indonesia San Marino
B
DGT active participation in international cooperation throughout 2011, not only in seminars,
DGT Participation
but also conferences and fora, are as follows:
in International
Fora
a. participant in the Peer Review Seminar Global Forum on Transparency and
Exchange of Information on 15 17 March 2011 in Canberra, Australia;
b. participant in the Meeting of the Advisory Group for Cooperation with Non-OECD
Economic on 28 30 March 2011 in Livingstone, Zambia;
c. participant in the 5th International Financial Reporting Standards (IFRS) Regional
Policy Forum & International Seminar on 23 24 May 2011 in Denpasar, Bali;
d. participant in the Global Forum on Transparency and Exchange of Information for
Tax Purposes on 31 May 1 June 2011 in Bermuda;

97
Disputes
Settlement
e. resource person in the Seminar on Tax, Regulation, and Investment Opportunities

in Indonesia on 1 June 2011 in Bangkok, Thailand;
f. speaker at the National Tax Conference 2011 on 19 20 July 2011 in Kuala
Lumpur, Malaysia;
g. participant in the 13th Study Group on Asian Tax Administration and Research
(SGATAR) Working Level Meeting on 5 8 September 2011 in Macau, China;
h. participant in the 8th Technical Conference of Association of Tax Authorities of
Islamic Countries (ATAIC) on 1 5 October 2011, in Saudi Arabia;
i. participant in the 4th Meeting of the Global Forum on Transparency and Exchange
of Information for Tax Purposes on 25 26 October 2011, in Paris, France;
j. participant in the Multilateral Convention on Mutual Administrative Assistance in
Tax Matters on 3 4 November 2011, in Cannes, France;
k. resource person in the EYs Tax Symposium on 15 17 November 2011, in
Singapore;
l. participant in the 41st SGATAR Meeting on 21 25 November 2011, in Kota
Kinabalu, Malaysia; and
m. participant in the 4th International Tax Dialogue Global Conference on Tax and
Inequality on 7 9 December 2011, in India.
In 2011, several donor countries/institutions have actively given assistance to DGT in

the forms of technical assistance, consultancy service, and assistance in sending DGT
personnel abroad to participate in seminars/trainings/workshops. Donor institutions
Activities of
Donor Countries/ C
Institutions
are international non-governmental institutions, such as IMF, World Bank, AusAID, and
JICA, that provide assistance to DGT. Donor country is an office/department unit in the
government, such as Australian Taxation Office, which establishes bilateral cooperation
with DGT.
In general, donor countries/institutions assistance is funded by grant. The types of

assistance can be, among others:
a. technical assistance by an individual long-term advisor/resident advisor;

b. technical assistance by an individual short-term advisor/expert;
c. consultancy service by a consulting firm;
d. trainings/seminars/workshops in Indonesia or abroad; and
e. comparative study to other countries.
Financing (funding source, disbursement plan, funding allocation) is generally managed by

each donor institution. Selection of technical advisors, experts, and consultants is generally
done by the donor parties by DGT involvement.
Donor institutions/countries that have actively involved in tax reform process at DGT in
2011 are as follows:
1. The World Bank
Beside supporting the Project for Indonesian Tax Administration Reform (PINTAR), the
World Bank also played a role in the management of grant included in Public Financial
Management-Multi Donor Trust Fund (PFM-MDTF) framework funded by the European
Union and the Government of the Netherlands. The grant has been used for preparation
of PINTAR program and supporting programs for PINTAR, i.e. consultancy services in
criminal investigation, independent bid evaluation, change management, dan knowledge
management.

98
2. Australia Indonesia Partnership for Economic Governance (AIPEG)

AusAID
AIPEG is an agency established by the Government of Australia. This agency was

established due to dramatic economic crisis so that the Government of Indonesia needed
technical assistance in economic governance. AIPEG gives consultancy services in the
formulation of public sector policies and the implementation of programs consistent with
the reform agenda of the Government of Indonesia.
This AIPEG program is scheduled to take place for six years since 2010 focusing on
leadership, strengthening of institution, monitoring and evaluation, Government Partnership
Fund (GPF), and gender issue.
Some activities of DGT - AIPEG in 2011 include, among others:
a. call center program development;

b. human resources strategies and framework development;
c. law capacity building;
d. taxpayers survey;
e. IT mentorship;
f. internal compliance and investigation;
g. tax revenue modeling and benchmarking;
h. culture strategy development;
i. data clean-up assistance;
j. surveillance course;
k. project management training;
l. tax service and satisfaction survey result workshop;
m. tax base broadening workshop;
n. revenue potential, compliance, and benchmarking workshop;
o. monitoring evaluation training;
p. basic training for internal investigation;
q. database clean-up workshop.
AIPEG has also actively assisted DGT in cooperation with Australian Taxation Office (ATO).
AIPEG assistance includes facilitating ATO in the provision of assistance for DGT, such as
assistance of experts from ATO visiting DGT and assistance for DGT personnel visiting
ATO.
Assistance given by AIPEG in the cooperation between DGT and ATO includes, among
others:
a. facilitating the Workshop on Incident-Management Corruption in February 2011;

b. sending DGT personnel to Canberra, Australia in September 2011 as a follow up
action of the Workshop on Incident-Management Corruption; and
c. sending DGT personnel to Brisbane, Australia in October 2011 for the SGATAR
Joint Training Program themed Strategic Planning and Communication Strategy.

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3. Australian Taxation Office (ATO)
For the past few years, DGT and ATO have established a partnership in capacity building
through expertise and knowledges exchange in tax administration. The cooperation of
DGT and ATO is a bilateral cooperation between two similar organizations under the
Government Partnership Fund (GPF) scheme.
Types of cooperation between DGT and ATO consist of the following activities.
a. Multilateral Activities
ATO convenes several international meetings with different topics in Australia
attended by representatives of tax institutions from different countries.
b. Bilateral Assistance
ATO shares knowledge and expertise in the forms of seminars and other types of
technical assistance to DGT undertaken in Indonesia or Australia during a certain
period of time.
In 2011, assistance given by ATO to DGT includes:
a. ATO experts visit to share knowledge in the Incident-Management Corruption in

February 2011;
b. assistance to attend the Global Forum Peer Review Seminar in Canberra, Australia
in March 2011;
c. assistance to participate in benchmarking study to ATO themed the Incident-
Management Corruption in September 2011; and
d. assistance to attend the SGATAR Joint Training Program themed Strategic
Planning and Communication Strategy in October 2011.
4. Japan International Cooperation Agency (JICA)
In December 2009, the Record of Discussion (RD) and Minutes of Meeting (MM) containing
DGT-JICA cooperation activity plans for 2010-2014 entitled Project on Modernization of
Tax Administration (Phase II) was signed. In this project, JICA assistance activity at DGT
consists of:
a. human resources capacity building (e-learning, On-the-Job Training, and personnel

assessment);
b. collection;
c. investigation; and
d. objection and appeal.
JICA also provides assistance in human resources capacity building, by providing post-
graduate scholarships and short courses for DGT personnel in Japan.

100
In 2011, several assistances given by JICA to DGT include:
a. updating e-learning modules for General Provisions and Tax Procedures, Income
Tax, and VAT;
b. employees training on Human Resources Development in Jakarta;
c. On-the-Job Training Workshop in Jakarta;
d. human resources training on data and information exchange in Japan; and
e. training on Consumption Tax.
In 2011, DGT hosted for delegations from various countries, not only for comparative study,
D Visit by Foreign
Delegations but also for discussions on the latest tax issues, such as tax audit, incident management-
corruption, and transfer pricing dispute resolution.
Visits by foreign delegations during 2011 and materials discussed are given in the following
table.
Visits by Foreign Delegations to DGT

No. Delegation Date Subject of Discussion
in 2011
1. USA 18-21 January USA-Indonesia Competent Authority
(Internal Revenue Service) Meeting
2. Australia 7-11 March Sharing experience in Incident
(Australian Taxation Office) Management-Corruption
7-9 September International tax cooperation
3. India 6 May Comparative study on DGT
(Government of India)
4. Japan 26-28 January Exchange of Information on request
(National Tax Agency) 17-18 February Japan - Indonesia Competent
Authority Meeting
7-8 April Japan-Indonesia Competent
Authority Meeting
14 April Discussion on tax authority
20-21 June Implementation of cooperation
between DGT and NTA Japan
to share knowledge on tax
administration system of Japanese
Consumption Tax (VAT).
5. South Korea 18 March Discussion on how tax administration
(National Tax Service) in Indonesia and South Korea can
strengthen bilateral cooperation
15 April Discussion on information technology
25 August Courtesy Call by the First Secretary
for Tax of the Embassy of the
Republic of Korea for the Republic of
Indonesia

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No. Delegation Date Subject of Discussion
4-10 October Visit by NTS Officers, the winner in
Tax Officers Contest of Knowledge
on Foreign Tax System, at NTS Korea
6. Malaysia 5-6 July A two-day program to meet with
(Inland Revenue Board) several officials within DGT whose
main duties and functions are related
to performance improvement.
(Labuan Financial Services 20 July Visit to DGT in order to review the
Authority) provision of Tax Holiday for investors.
7. OECD 14-18 March Seminar on Advanced Tax Treaties
18-22 July Coordination Meeting on Transfer
Pricing Dispute Resolution
12-16 December Seminar on Exchange of Information
and Mutual Assistance in Tax Matters
8. Palestine 28 November- Study visit by the Palestine
(General Directorate of 5 December delegations and Courtesy Call from
Property Tax) the Director General of Palestine Tax
Authority
9. Vietnam 21-24 February Study-visit on tax audit area
(General Department of
Taxation)

102
2011
Annual Report
The willingness to take responsibility for others and the society
is the forerunner of leadership in our institution.

103
2011
Annual Report
Apparatus
Resources
Management
10
DGT focuses on improvement of the human
resources quality and creates a good governance
administration. With its improved human resources
quality, DGT will be able to actualize itself as a
modern, accountable, and trusted institution by the
society.

104
Apparatus is a unity of tools, consisting of personnel, institutions, and management. As a

big organization, not only in terms of total number of operational offices, but also in terms
of total number of employees, DGT always runs its apparatus effectively in performing its
duty in tax revenue administration.
Number of DGT employees by the end of 2011 was 31,736 personnel with distribution
A Human Resources
Management
based on gender, age group, education, and rank group as shown in the following
diagrams.
Distribution of Employees based on

Gender
25.01%
74.99%
Men Women

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8,000 Age Group
7,009
7,000
5,593
6,000 5,193
5,000 4,399
3,665
4,000
2,641
3,,000 2,452
2,000
781
1,000
3
0
<21 21-25 26-30 31-35 36-40 41-45 46-50 51-55 >55

14,000
Education Level
11,569
12,000
10,000
8,000 7,001
6,000 4,639
4,256 4,202
4,000
2,000
31 38
0
up to Diploma Diploma Diploma Under Graduate Post
High I II III Graduate Graduate
School

Rank Group
57.52%
38.21%
4.26%
0.01%
Rank Group I (lowest) Rank Group II
Rank Group III Rank Group IV (highest)

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Distribution of Employees by
Island
20,574
1,818
767
613 5,257
1,993
714
Java Sulawesi Nusa Tenggara
Bali Papua-Maluku Kalimantan
Sumatera
Human Resources (HR) strategic position as resources can bring the organization to grow
and to realize its vision and mission. In HR management, one situation that often faced by
DGT is the difficulty to find and to select the best employees within the organization. On
the one hand, HR management is not only by undertaking objective performance appraisal
function as part of personnel career management. On the other hand, DGT realizes that it
also needs to develop comprehensive HR Management according to common practices,
consisting of HR organization development, HR planning, recruitment and selection,
personnel administration data management, HR training and development, performance
management, career management, and remuneration and benefit management.
During 2011, DGT undertook HR Management development in the forms of defining of HR

Management Blue Print and implementation of other programs.
1. Defining of HR Management Blue Print
In 2011, DGT defined references in designing, formulating, implementing, and evaluating

comprehensive and sustainable HR management development in the form of HR
Management Blue Print. Phases in HR Management Blue Print defined for the period of
2011-2018 can be illustrated through an HR Management Strategic Map.

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DGT HR Management Strategic Map
VisiON: TO BECOME the organizer of effective and efficient performance and competency-
based hr management to materialize dgt vision and missions
stakeholder Perspective
excellent performance employee
sdm-s.1. sdm-s.2. sdm-s.3. sdm-s.4.

High High of High integrity Strong culture
Competency employees employee employee
Employee satisfaction
Recruitment Performance Development career

management Reward
HR-P.5. HR-P.8.
HR-P.1. HR-P.3. HR-P.10.
Improvement of Improvement of
Recruitment Improvement Improvement of
Leadership Excellence effectiveness of
of high quality of trustworthy performance-
performance and
Internal process perspective
employees and transparent based

performance competency- remuneration
management HR-P.6. based career management
Improvement of training management
and development
HR-P.2. effectiveness
HR-P.4. HR-P.9. HR-P.11.
Improvement of
Improvement Improvement Improvement
new employees
HR-P.7. of talent
orientation of performance of employees
Improvement of the management
effectiveness appraisal benefit program
Quality of Competency effectiveness
effectiveness
Assessment
supporting business processes
HR-P.12. HR-P.13. HR-P.14. HR-P.15. HR-P.16.

Reliable HR Planning Improvement of Improvement Improvement Improvement
Management HR Administration of knowledge of employees of internal
Quality management system supervision and communication
empowerement
effectiveness effectiveness effectiveness
Learning & Growth
Perspective
HR-I.1. HR-I.2. HR-I.3. HR-I.4.

HR infrastructure Staff Competency HR Budgeting HR Organizational
capabilities development improvement Effectiveness development
improvement

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The issuance of the Decree of the Director General of Taxes Number KEP-233/PJ/2011
dated 26 September 2011 regarding DGT HR Management Blue Print for 2011-2018 is
expected to serve as momentum of DGT structured change through the attainment of:
a. development of high quality employees, through recruitment of high quality

personnel and effectiveness improvement of new employees orientation;
b. availability of quality performance management, through improvement of
trustworthy and transparent performance management and effectiveness
improvement of performance appraisal;
c. implementation of HR development management, through improvement of
excellent leadership, effective improvement of training and development, and
quality improvement of employees competency assessment;
d. availability of quality career management, through effective improvement
of performance and competency based career management, and effective
improvement of talent management;
e. building of reward culture, through improvement of performance based
remuneration management, and improvement of employees benefit;
f. availability of quality and effective HR management business process support,
through reliable HR planning management, improvement of HR administration
quality, effective improvement of personnel control and development, effective
improvement of HR internal communication, and effective improvement of
knowledge management system;
g. availability of reliable HR internal resources, to support the implementation of
effective HR management; and
h. building excellent performance employee marked with employees who have
high competency, high satisfaction level, high integrity, and strong organizational
culture.
To further ensure the implementation of HR Management Blue Print, implementation

strategy will be designed, that consists of four phases of development and implementation
of HR management which each phase has clear destination.
Building performance culture and developing excellent leadership
Phase I Performance is a key factor in attaining optimum productivity. For this purpose,
performance culture needs to be built through development and implementation
2011-2012
of trustworthy and transparent development and implementation of performance
appraisal system, supported with development of excellent leadership.
Developing employees competency and building a reliable HR management

information system
Phase II
DGT is a continuously growing organization; hence, it affects the demand for
2013-2014
employees competency development according to the position requirements.
Therefore, a personnel development system needs to be set up, in accordance with
competency based needs. At this phase, a reliable HR management information
system will also be built so that HR organization unit can move up and focus from
administrative HR management activities to strategic activities.

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Developing HR planning and implementation of employees career management
Phase III DGT is a continuously growing organization with vast organization and HR distribution.
To fulfill the needs for appropriate HR in terms of quantity and competency, a reliable
2015-2016
HR planning system needs to be developed. In addition, performance and competency
based personnel career management system needs to be implemented, which also
considers unit classification.
Building reward culture as the base for the development of talent management
Phase IV After all HR management functions have been developed and run, DGT is expected to
2017-2018 be able to produce employees with the best competency and performance supported
with sufficient reward culture, so that talent management can be well developed where
employees with the best competency and performance will be given priorities to be
promoted in DGT strategic position.
2. Performance Culture Development
In the implementation plan of HR Management Blue Print Phase I (2011-2012), the

development of performance culture and development of excellent leadership has been
set as the objectives of the development and implementation process of HR management
within DGT.
As a real measure of performance culture development, personnel performance appraisal

system is supported with the following strategic initiatives.
a. Dissemination of performance culture through DGT internal media (HR internal

website) and continuous internal meetings on the importance of performance as
the determinant factor in the attainment of optimum productivity.
b. Signing of Performance Contract starting from the Director General of Taxes
(Kemenkeu-One) up to the staffs (Kemenkeu-Five).
c. Monitoring of the preparation implementation of Performance Plan and
implementation of Staff Performance Appraisal, so that the implementation of
performance appraisal system can be done in a timely manner.
d. Capability enhancement of each supervisor to undertake coaching of employees
in order to improve productivity, because each personnel has potential to develop
and to work more optimally if given the right guidance.
e. Training on Idenftication of Personality Type through MBTI (Myers Brigght Type
of Indicators) method attended by officials who responsible for HR. Through this
training the participants are expected to be able to:
1) analyze the potential strengths and weaknesses of a team in the organization
by mapping the talents, behavior, and comunication style of each individual;
2) implement the comprehension of various types of personality to enhance
communication process, team work, managing conflicts, in order to improve
leadership effectiveness; and
3) increase the quality of communication to multiply the effectiveness of the
organization by bringing up and maintaining team motivation so that the
coaching process can take place effectively.

110
f. Implementation of reward program for excellent employees. This program does

not only aim to motivate DGT employees and to serve as a form of appreciation
of the organization to the employees, but more than that, this program also
serves as an implementation of talent management at DGT. This program is
designed to use existing appraisal standards and information, to encourage all
supervisors to undertake performance appraisal properly and responsibly. This
program is a preliminary step in institutionalizing the reward provision to excellent
employees. For 2011, this program was intended for certain positions, namely
Account Representative, Tax Objection Reviewer, and Tax Auditor. In the future,
this program will be expanded to provide equal opportunity for all of employees at
all levels and types of position to become the best and to participate in this reward
program for excellent employees.
3. Excellent Leadership Development
Excellent leadership development program is provided for officials at DGT holding key
positions, especially those of echelon III. This program focuses on two issues, namely
improvement of performance and enhacement of leader as a role model.
Performance improvement in excellent leadership development program is done in the

form of Coaching and Managing Conflict training. In this training, each participant is
provided with skills to: (i) perform coaching and give feedback to subordinates in order to
encourage improvement of subordinates performance; (ii) learn effective communication
style in order to enhance optimum team performance; and (iii) overcome conflicts arising
in the working environment.
Meanwhile, enhacement of leader as a role model in excellent leadership development

program is done in the form of Transformational Leadership Training. In this training all
participants are provided with skills focusing on how a leader reacts towards changes
and how to treat changes to create effectiveness in work. In addition, this training also has
another objective on how to help and to coach team members to accept changes.
4. HR Capacity Building
Directions and policies of HR capacity building in 2011 focused on:
a. costumer needs, especially service unit which is DGTs front liner to support tax
revenue, compliance, and excellent services;
b. embedded of organizational values; and
c. refinement of employees capacity building infrastructure.
HR capacity building activities and programs are as follows.
a. Employees Competency Assessment

Implementation of employees competency assessment is a form of employees
competency appraisal whose result can be used as a base for decision making
in HR, namely career planning, promotion/rotation, and employees capacity
building. To develop employees competency assessment, DGT has carried out
several activities, namely:

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1) finalization of the draft of Technical Competency (Hardskill) Dictionary for

services, law enforcement, and HR;
2) development of technical competency assessment software for tax knowledge
(e-assessment); and
3) conducting of review of DGT behavioral competency measuring tools and
business process assessment center.
Throughout 2011, DGT carried out assessment to 840 officials of echelon IV and
Tax Auditors.
b. Education and Training

To accelerate improvement of HR professionalism and integrity, DGT has taken
efforts to increase HR quality and capacity building, through education and training,
and development. Competency-based education, training, and development are
conducted to sustain duties and functions of personnel or units and designed
through Adult Learning Principles (ALP) approach.
Education and training for DGT personnel that took place in 2011 are:
a. training conducted by DGT, particularly related to tax technical and task

implementation operational, i.e. 344 types of training with a total number of
participants of 28,096 personnel;
b. education and training organized by Finance Education and Training Agency
(BPPK), i.e. 341 types of education and training with a total number of participants
of 13,200 personnel;
c. overseas training conducted in cooperation with international institutions and
donor countries, such as OECD, JICA/NTA Japan, AIPEG/ATO Australia, and IMF;
and
d. personnel development by sending employees for studying to advance degree
(Masters dan Doctors degrees) both domestic and overseas through scholarships,
not only from the Government of Indonesia, but also from institutions/donors, such
as World Bank, IMF, JICA, KOICA, AusAid, USAid, etc.
5. On-the-Job Training
On-the-Job Training (OJT) is training or coaching undertaken by senior personnel at the

workplace in order to provide knowledge, skills, and attitude to newly assigned employees.
The implementation and development of OJT throughout 2011 can be explained as follows:
a. OJT for new employees (Civil Servant Candidate) was allocated for 1,155
participants from 144 Small Taxpayer Offices which came from the recruitment of
university and STAN Diploma III graduates. The result of survey to 793 participants
shows that 692 personnel (87.26%) expressed their satisfaction in the organization
of the OJT;
b. OJT for Tax Objection Reviewers was allocated for 202 employees appointed as
new Tax Objection Reviewers at 29 Regional Tax Offices;
c. development of system, module, and legal base has been conducted for the
development of OJT for Account Representatives and will be implemented in
2012.

112
6. e-Learning
e-Learning is not only an assessment tool for technical competency but also a learning
tool for employees to sustain personnel capacity building program. During 2011, DGT has
undertaken the following e-learning development and implementation activities.
a. development of Learning Management System (LMS) integrated with Personnel,

Financial, and Asset Information System (Sistem Informasi Kepegawaian,
Keuangan, dan Aktiva/SIKKA);
b. improvement of IT infrastructure for e-learning supporting through procurement of
new server in order to meet the minimum requirements;
c. refinement of tax interactive e-learning modules, due to changes of tax laws and
regulations;
d. development of module on assessment and validation of tax question database to
enrich question database as one of the assessment tools;
e. development of e-learning module and tax audit cycle question database to
complement existing modules;
f. enrichment of soft skill subjects for e-learning module (time management,
negotiation skill, and knowledge management);
g. implementation of online test for the selection of participants of the Workshop on
Computer Forensic Audit Task Force within Regional Tax Offices.
e-Learning development and implementation in the following year will focus on the
development of competency-based e-learning modules for the enrichment of existing
modules and optimization of e-learning implementation.
B Employee 1. DGT Whistle-blowing System

Discipline
Monitoring and Regulation of Director General of Taxes Number PER-22/PJ/2011 dated 19 August
Enforcement 2011 regarding the Obligation to Report Misconducts and Handling of Misconducts
Reporting (Whistle-Blowing) within DGT has been issued to prevent and to undertake early
detection of potential misconducts within DGT. This regulation is expected to increase
active participation of employees and society to become whistle-blowers through available
complaint line. This provision is a further description of the Regulation of the Minister of
Finance Number 103/PMK.09/2010 and the Decree of the Minister of Finance Number
149/KMK.09/2011.
Besides avoiding the incurrence of misconducts, DGT whistle-blowing system is also

intended to rebuild public trust in DGT by encouraging all employees to change permissive
culture to corrective culture. In the end, this system is expected to sustain the optimum
achievement of tax revenue target.

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2. Employee Discipline Enforcement
Employee discipline enforcement, i.e. sentence of punishment, as a part of personnel

development efforts is done based on the prevailing laws and regulations. Sentence of
punishment to personnel proven to conduct breaching will be done based on the result of
audit by the employees direct supervisor and team of auditors appointed by the Minister
of Finance. To undertake audit, the employees direct supervisor and the team of auditors
shall consider the result of audit done by DGT internal affairs unit or the Inspectorate
General of the Ministry of Finance.
Sentence of punishment, i.e. imposition of disciplinary sanction and issuance of warning

letters, processed by DGT during 2010 and 2011 as shown in the following table.
Sentence of Punishment to Employees
in 2010 2011
Legal Basis Type of Punishment 2010 2011
Warning 506 89
Regulation of Minister of Finance 1 Warning Letter

st
395 43
No. 15/KMK.1/UP.6/1985 (Revoked) 2nd Warning Letter 79 12
3 Warning Letter
rd
32 2
Written Warning 32
Low Level: 61 86
Verbal Reprimand 23 26
Written Reprimand 19 27
Written Dissatisfaction Statement 19 33
Middle Level: 33 43
Delay of Periodical Salary Increase 20 17
Government Regulation No. 30 Year 1980 Reduction of Salary for one time of Periodical Salary Increase 5 0
Government Regulation No. 53 Year 2010 Delay of Rank Promotion 7 8
Demotion to one Rank Lower for one year 1 18
High Level: 30 32
Demotion of Rank 14 5
Demotion of Position 0 0
Release from Position 0 5
Discharge with Respect Not by Own Request 7 4
Discharge with No Respect 9 18
Government Regulation No. 32 Year 1979 Discharge with Respect Not by Own Request 3 0
Discharge with No Respect 8 9
Government Regulation No. 4 Year 1966 Suspension 16 4
Total 657 263

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C Organizational One of DGT strategic targets for 2011 is reliable organizational development. To support the
Development attainment of that strategic target, the organizational development was done sustainably
so that in the implementation of its duties and functions, each working unit at DGT can run
effective and efficiently.
1. Expansion of Working Territory of Data Processing Center
To improve taxation data and document quality, accuracy, consistency, and security
through the use of information technology, a Taxation Data and Document Processing
Center (DPC) has been established. DPC has the duty to carry out reception, scanning,
recording, and storing of taxation documents.
At the beginning of its establishment, tax documents processed by DPC were tax
documents from Tax Offices in Jakarta Province. However, in line with the development of
technology at DPC, data processing can be done more effectively and efficiently; hence, it
can be used to process tax documents with vast coverage.
In 2011, through the Regulation of the Minister of Finance Number 132/PMK.01/2011 the
responsibility area of DPC extended to process all tax documents from Tax Offices in Java
Island.
2. Establishment of Data Processing Office
To overcome work load in capturing Tax Returns as a result of the increase of the number
of taxpayers, in 2011 DGT once again set up a unit responsible for taxation data and
document processing. This unit of echelon III equivalent with nomenclature of Taxation Data
and Document Processing Office (DPO) which was established based on the Regulation
of the Minister of Finance Number 133/PMK.01/2012 in Makassar with responsibility area
consisting of all provinces in Sulawesi and Province of North Maluku. The functions of DPO
are:
a. collection, reception, and sorting of taxation documents;

b. scanning of taxation documents;
c. storing and archiving of taxation documents;
d. lending service of taxation documents to other units within DGT; and
e. transfer of data, operational support system, and quality assurance of document
scanning.
This unit reports directly to the Director General of Taxes and is managed by the Director
of Tax Information Technology. DPO Makassar started its operation on 1 January 2012.

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3. Establishment of External Data Processing Office
As mandated by Article 35A of the Law on General Provisions and Tax Procedures, each
government institutions, agencies, associations, and other parties shall provide tax-related
data and information to DGT. Consequently, DGT must be able to accept and to manage
those data and information.
In 2011, by the Regulation of the Minister of Finance Number 134/PMK.01/2011, External

Data Processing Office was established to undertake reception, scanning, and storing
of tax documents, in addition to transfer of tax related data provided by government
institutions, agencies, associations, and other parties by using information technology.
This unit reports directly to the Director General of Taxes and is managed by the Director
of Tax Information Technology. External Data Processing Office is located in Jakarta with
responsibility area covering all over Indonesia and started its operation on 1 January 2012.
4. Preparation of Preliminary Concept of PINTAR (Project for

Indonesian Tax Administration Reform) Organizational Impact
Document
PINTAR is a program for refinement of taxation business process and development of

integrated information system platform. PINTAR is one of the programs in Tax Reform
Phase II which has been prepared since 2008 and planned to be rolled out in 2014.
In 2011, DGT began to compile the Organizational Impact Document (OID), namely one of
the documents to be prepared in PINTAR. The substance of this document is the analysis
on how organization, infrastructure, and HR changes will take place as a consequence
of PINTAR execution. The preliminary concept of OID has been prepared and quality
assurance over the concept has been done. The result of the quality assurance shows that
the OID format needs to be refined. Refinement of OID is still ongoing process in line with
the timeline of PINTAR program activities.
5. Organization Development of Head Office and Operational Unit
As a follow up of evaluation on DGT tax administration business process conducted in

2009 and of proposal for organization development proposed by units within DGT, in 2011
DGT carried out evaluation over DGT Head Office and operational units.
Evaluation of DGT head office organization was done through the completion of evaluation
application by resources people and interview with all echelon II officials at DGT head
office. Evaluation report and preliminary recommendations have been made, although
further analysis is still required related to the proposals for:

116
a. establishment of Directorate of Human Resources;

b. change of Directorate of Internal Compliance and Apparatus Transformation to
Directorate of Internal Compliance, in addition to the creation of Internal Control
Unit at Regional Tax Offices/Tax Offices;
c. merger of Sub-directorate of Organization Transformation and Division of
Organization and Management into Directorate of Transformation of Business
Process;
d. merger of Directorate of Tax Information Technology and Directorate of Information
and Communication Technology Transformation; and
e. focusing of the functions of the Secretariat of the Directorate General (Division
of Finance, Division of Equipment, and Division of General Affairs), as the impact
of the creation of the Directorate of HR and as mandated by the Presidential
Regulation Number 54 Year 2010 to set up Procurement Service Unit (Unit
Layanan Pengadaan/ULP).
On a related matter, organization evaluation of operational unit was done through several
phases, i.e.:
a. Online Survey
Evaluation process began with the online survey distributed through sampling
using Personnel, Financial, and Assets Information System (SIKKA) to 816
respondents of various DGT working units. The result was 709 respondents or
around 86.89% of the total respondents completing the questionnaire. To ensure
confidentiality and to encourage respondents to complete the questionnaire,
request for questionnaire data completion was done through confidential letters to
the respondents.
b. Sample Selection
Offices used as samples consisted of 12 Regional Tax Offices spread throughout
Indonesia, including the Tax Offices under the same regional office. The first
criterion for the determination is based on the area distribution, which consists
of five areas, namely Sumatera, Java-Bali, Kalimantan, Sulawesi, and Maluku and
Papua. Regional Tax Offices and Tax Offices are selected as samples to be visited
are offices with the largest gap based on the online survey result.
c. Pilot Project
The objective of pilot project is to test organization evaluation system which used
to assess whether the implementation of on-field data collection is in line with
the expected objectives. Offices selected for the pilot project are East Jakarta
Regional Tax Office and Pasar Rebo STO.
d. Field Visit through Completion of Evaluation Application by Resource
Person.
Within the period of May to August 2011, offices visited comprised all echelon II
units at the Head Office, DPC, and 7 Regional Tax Offices, in addition to 2 or 3 Tax
Offices within Regional Tax Offices selected through sampling.
e. Desktop Analysis of Organization Evaluation
Desktop analysis of organization evaluation is an implementation of organization
evaluation by preparing analysis on existing problems, based on secondary
data from various sources. Desktop analysis of organization evaluation for 2011
was done by preparing matrix of evaluation result which was elaboration of
organization evaluation result of 2011, business process evaluation result of 2009,
and evaluation result to propose organization changes of operational unit.
f. Finalization of Evaluation Reports
Upon evaluation reports, elaboration has been undertaken and activity and
academic reports have been produced on organization structure of several
operational units (STO and Tax Service, Counseling, and Consultation Office).

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Moreover, in 2011 DGT also began to carry out analysis on the compilation of unit
classification over 299 Small Taxpayer Offices in the forms of several activities, namely
desktop analyzing, benchmarking to the Headquarter of Indonesian National Police and
the Head Office of the Indonesian Central Bank, and convening of discussion meetings.
Analysis on the compilation of unit classification over 299 Small Taxpayer Offices will be
continued in 2012.
D
As mandated by the Regulation of the Minister of Finance Number 191/PMK.09/2008, Risk Management
all echelon I units within the Ministry of Finance are obliged to apply and develop risk
management. Since 2009, DGT has gradually applied risk management to echelon II units
as Risk Owner Units.
The development of risk management at DGT during 2011 consists of the following
activities.
a. Implementation of risk management at all echelon II units at DGT;

b. Preparation of DGT Main Risk Profile which was done through risk assessment
from all Risk Owner Units. DGT Main Risks have become the main priorities in risk
mitigation planning. DGT main risks are:
1) collusion between Tax Auditors and taxpayers;
2) collusion between tax collection officers and taxpayers;
3) collusion between tax officers and taxpayers;
4) collusion in budget spending;
5) ineffective tax audit;
6) low compliance level of taxpayers;
7) ineffective tax investigation;
8) tax audit is not according to standards;
9) quality of preliminary evidence verification result is not optimal; and
10) tax Investigation quality is not optimal.
c. Preparation of risk standards within Regional Tax Offices. The Risk Standards are
necessary taking into account that the 31 Risk Owner Units at Regional Tax Offices
have same strategic targets so that they should also have same risk profiles,
except for certain risks which are influenced by the characteristics of each Risk
Owner Units at Regional Tax Offices. The Risk Standards of Risk Regional Tax
Offices have been prepared to allow Risk Owner Units at Regional Tax Offices to
prepare risk profiles and risk maps uniformity.
d. Risk management related HR development through:
1) risk management education and training organized by the General Finance
Training Center of the Ministry of Finance;
2) risk management dissemination and workshops;
3) training on the Essential of Risk Assessment Methodology organized by APB
Group Indonesia; and
4) Short Course on Strategic Enterprise Risk Management organized by Marcus
Evans in Singapore.

118 The passion to deliver added values for organization is realized
2011
Annual Report
through the effort of improving business process and
information technology in sustainable manner.

119
2011
Annual Report
Business
Processes and
Information and
Communication
Technology
11
DGT continuously refines its business processes to
adapt itself towards the dynamic changes in line with
the organizations vision. The business processes
can be conducted more effective and efficiently
with the support and optimal use of information
technology and communication.

120
A Business Process 1. Refinement of Standard Operating Procedure (SOP)

Refinement
SOP for DGT was first codified in 2008. The codification defined SOP for all of Tax Offices
and Regional Tax Offices. In its development, DGT has carried out various refinements to
its SOP, which include not only revisions and amendments, but also eliminations of SOP. In
2011, SOP refinement was marked with the issuance of:
a. Decree of the Director General of Taxes Number KEP-331/PJ/2011, which

defines/refines SOP for DGT Head Office;
b. Decree of the Director General of Taxes Number KEP-332/PJ/2011, which
defines/refines SOP for operational units; and

121
Disputes
Settlement
c. Decree of the Director General of Taxes Number KEP-333/PJ/2011, which

defines/refines SOP for the Taxation Data and Document Processing Center.
After the refinement, the number of SOPs that was still in effect at the end of 2011 was
1,665 SOP. This number can fluctuate along with organizational change and development.
In the future, SOP are expected to undergo sustainable refinements to build good corporate
governance and to support in achieving DGT vision and mission.
2. Business Process Mapping
Business Process is defined as a series of repeated activities to create customer value

through a process which transform an input into valuable output. DGT business process
map is a visual aid used to illustrate how DGT performs the work required to produce
valuable output based on the input it receives.
Business Process Mapping is very crucial for organization. Business Process Map depicts
the entire business process performed in an organization. Business process map generally
contains vision, mission, values, strategic targets, main and supporting functions of an
organization. Designing a business process map means defining existing business
functions as outlined in the mission to provide clear picture regarding the current condition
of the organization. Business Process Map is a management tool to understand the
existing business processes and a guideline for improving and developing new business
processes.
Business process mapping is a managerial supporting tool used not only at the planning
stage, but also at the implementation, control, and evaluation stages. At the initial stage,
the as is process map is first created. It is a document which illustrates how DGT
currently works. The map is then used as guidelines for performing DGT tasks (after being
elaborated in SOPs). It is expected that work standardization and a minimum level of task
completion can be attained. Furthermore, the as is map can also be used to analyze the
efficiency and effectiveness of a business process.
With regard to PINTAR program, DGT is also preparing the to be business process
map. This map aims to provide a picture of DGT business processes once PINTAR is
implemented. This picture will be used for planning purposes. The combination of as is
and to be Business Process Maps can be used to create a gap analysis aiming to identify
which business process should be added, eliminated, or modified in order to achieve the
targeted conditions. Furthermore, it can also be used to performed organizational impact
analysis, an analysis describing the impacts of PINTAR implementation towards DGT
organization structure.
3. National Tax Census Business Process Development
At the end of 2011, DGT launched the National Tax Census program in order to improve
taxpayers compliance level. National Tax Census business process as a part of the tax
base broadening business process is a comprehensive expansion/development of tax
canvassing activities which have been conducted by DGT. The development of National
Tax Census business process will become the foundation in preparing the National Tax
Census Technical Guidelines containing SOP and manuals (working instructions).

122
4. Administration of Selected Large Taxpayers
To provide excellent services to its taxpayers and to support the implementation of modern
tax administration as well as to create a well-structured administration in order to simplify
supervision, DGT performs periodic and sustainable evaluations, particularly over selected
large taxpayers.
Administration of selected large taxpayers as mentioned above consists of taxpayers

registered at Tax Offices within Large Taxpayers Regional Tax Office, Tax Offices within
Jakarta Special Regional Tax Office, and Medium Taxpayer Offices. This is regulated under
the Regulation of the Director General of Taxes Number PER-49/PJ/2011 regarding the
Place for Business Registration and Reporting for Taxpayers Registered at Tax Offices
within Large Taxpayers Regional Tax Office, Tax Offices within Jakarta Special Regional Tax
Office, and Medium Taxpayer Offices.
1. Information and Communication Technology Governance

B Development of
Information and
Communication Information and Communication Technology (ICT) Governance is a framework which
Technology regulate and manage the entire planning, implementation, daily operations, data security,
service continuity, and internal evaluation of DGT ICT implementation through a firm and
transparent leadership hierarchy.
To provide clear reference for the creation of ICT Governance, DGT has reviewed, revised,
and formulated policies and guidelines related to DGT ICT Governance. ICT policies and
guidelines stipulated by DGT during 2011 consist of:
a. Guidelines on ICT Governance on Internal Audit;

b. Guidelines on ICT Governance on Document Control and Record Keeping;
c. Guidelines on Teleworking;
d. Guidelines on Information Security Management Review;
e. Guidelines on Malicious Software Prevention;
f. Guidelines on Encription and Key Management;
g. Guidelines on Information Asset Management;
h. Guidelines on Improvement, Prevention, and Information Security Threats
Management;
i. Guidelines on Intellectual Property Rights Management;
j. Guidelines on Data and Information Processing Hardware and Facility Security;
k. Guidelines on System /Data /Information Backup and Restore;
l. Guidelines on ICT Service Configuration and Asset Management;
m. Guidelines on ICT Service Level Management;
n. Guidelines on ICT Service Release and Modification Management;
o. Guidelines on ICT Service Capacity and Availability Management;
p. Guidelines on End User Computing Management;
q. Guidelines on ICT Application and Infrastructure Development;
r. Guidelines on ICT Naming Rules and Data Management Dictionary;

123
Disputes
Settlement
s. Policy of ICT Project Management;

t. Guidelines on ICT Project Planning and Initiation;
u. Guidelines on ICT Project Implementation;
v. Guidelines on ICT Project Quality Assurance;
w. Guidelines on ICT Project Technical Document Management;
x. Guidelines on ICT Service Continuity Management;
y. Guidelines on ICT Business Impact Analysis and Risk Assessment;
z. Guidelines on ICT Service Continuity Testing and Training;
aa. Guidelines on ICT Service Continuity Implementation; and
bb. Policy on ICT Performance Monitoring and Evaluation
These guidelines and policies, which stipulated in the forms of regulations and circulars
letter of Director General of Taxes, serve as the foundation for implementing ICT governance
at DGT. Considering the vast scope of ICT Governance that has been established, the
dissemination of the above-mentioned policies and guidelines to all units throughout
Indonesia in 2011 was performed gradually through management meetings, Operator
Console forum, and workshops.
2. Implementation of ICT Evaluation
In the implementation of ICT evaluation, DGT invites external supervisory parties, such
as the Inspectorate General of the Ministry of Finance, the Audit Board of the Republic of
Indonesia, and the Corruption Eradication Commission, to participate actively in monitoring
and improving the effectivenes and efficiency of DGT information system. The result of the
evaluation is 36 recommendations by the Corruption Eradication Commission concerning
Information System Service Monitoring. In 2011, five recommendations were resolved,
while the others are still in progress.

124
3. Development of ICT System and Infrastructure
In order to improve services and monitoring quality to taxpayers, and also overall
performance, during 2011 DGT developed the following ICT system and infrastructure.
a. Improvement of the taxation system, by doing the following activities:

1) improving DGT Information System (Sistem Informasi Direktorat Jenderal
Pajak/SIDJP) and Tax Information Modification System (SIPMod) by refining
the audit and collection modules, web service that records local Tax Returns,
2010 Annual Income Tax Return for Individual, 2010 Rupiah and Dollar Annual
Income Tax Return for Corporate module, Notice on Tax Exemption Articles
21/22/23, and Notice on Income Tax Exemption Article 22 on Gold;
2) developing supporting system which is consisted of software for e-Tax
Returns of VAT 1111 and VAT 1111 DM, Drop Box 2011 module, Approweb,
Feeding program, Organization Evaluation, Tax Return data cleansing, and
the recording and monitoring of 16 DGT Quick Wins in services at DGT web
portal;
3) developing a system, namely Dashboard, to ease management tasks in
monitoring revenue performance of all operational units. This system can
display information in both graphics and tables. The key information shown by
the Dashboard includes target achievement, revenue growth, tax revenue
contribution from five dominant sectors, and prognoses.
b. Development of system for National Tax Census used to record census data
acquired from the result of visiting to taxpayers.
c. Improvement of infrastructure to increase its performance and capacity, and to
rejuvenate any obsolete devices. Activities undertaken were, among others:
1) fulfilling license requirements for Oracle and Oracle Real Application Cluster
database;
2) refining SAN Switch infrastructure to maximize the performance of the system
it supports;
3) refining data communication network infrastructure;
4) refining infrastructure related to the establishment of Taxation Data and
Document Processing Office in Makassar;
5) increasing capacity of computers and other supporting devices to improve
work flow;
6) utilizing virtualization technology to optimize devices.

125
Disputes
Settlement

126
2011
Annual Report
We are growing better because of the experience of the past
and responsibility towards future.

127
2011
Annual Report
Statistics
12
DGT has proved itself to be consistent in achieving
continuous improvements and developments and
professional in undertaking its tasks to finance the
state budget. This is reflected from the positive
trend of its overall performance since the tax
modernization started.

128
Number of Taxpayers
in 2007-2011
Type of Taxpayer 2007 2008 2009 2010 2011
Individual 4,988,449 8,388,816 13,949,750 17,327,184 19,913,904
Treasurer 348,451 379,681 434,355 467,984 507,844
Corporate 1,308,160 1,443,570 1,580,287 1,737,459 1,942,811
Total 6,645,060 10,212,067 15,964,392 19,532,627 22,364,559
Note: based on data cleansing in 2011
Annual Tax Return-Filing Compliance

Ratio in 2007-2011
Description 2007 2008 2009 2010 2011
Number of Taxpayers Obliged to File Annual Tax Return 4,231,117 6,341,828 9,996,620 14,101,933 17,694,317
Annual Tax Return Filed 1,278,290 2,097,849 5,413,114 8,202,309 9,332,626
Compliance Ratio 30.21% 33.08% 54.15% 58.16% 52.74%
Number of Taxpayers Using e-SPT

in 2007-2011
Year of tax return received 2007 2008 2009 2010 2011
Number of Taxpayers 29,301 43,897 58,880 61,651 120,790
Source: SIDJP and SIPMod database

129
Disputes
Settlement
Number of Taxpayers Using e-Filing

in 2007-2011
Year of Tax Return Received 2007 2008 2009 2010 2011
Number of Taxpayers 1,357 1,619 2,427 4,941 9,850
Source: e-Filing database
Tax Revenue in 2011
2011 Revised- Realization (trillion rupiah)

Growth
Type of Tax State Budget
2011 2010 (%)
(trillion rupiah)
Non-Oil & Gas Income Tax 366.75 358.03 298.17 20.07
VAT & Sales Tax on Luxury Goods 298.44 277.80 230.60 20.47
Land and Building Tax 29.06 29.89 28.58 4.59
Other Tax 4.19 3.93 3.97 (1.02)
DGT Revenue Excluding Oil & Gas Income Tax 698.44 669.65 561.33 19.30
Oil & Gas Income Tax 65.23 73.10 58.87 24.16
DGT Revenue Including Oil & Gas Income Tax 763.67 742.74 620.20 19.76
Source: tax revenue in 2010 and 2011 from Government Financial Report data
Comparison between Tax Revenue and

State Expenditures in 2007-2011
No. Description 2007 2008 2009 2010 2011
1 DGT Revenue Excluding Oil & Gas Income Tax (trillion rupiah) 381.37 494.09 494.49 561.33 669.65
2 DGT Revenue Including Oil & Gas Income Tax (trillion rupiah) 425.37 571.11 544.53 620.20 742.74
3 State Expenditures (trillion rupiah) 757.65 985.73 937.38 1,042.12 1,295.00
4 Comparison 1 : 3 (%) 50.34 50.12 52.75 53.86 51.71
5 Comparison 2 : 3 (%) 56.14 57.94 58.09 59.51 57.35
Source: tax revenue in 2007-2011 from Government Financial Report data

Notes: for the fiscal year 2010 and 2011 tax revenue on Acquisition Duty of Right on Land and Building is excluded

130
Contribution of Tax Revenue Towards

Domestic Revenue in 2002-2011
DGT Revenue
DGT Revenue Including
Excluding Oil & Gas State Expenditures Contribution Contribution
Year Oil & Gas Income Tax
Income Tax (trillion rupiah) (%) (%)
(trillion rupiah)
(trillion rupiah)
(1) (2) (3) (4) = (1) : (3) (5) = (2) : (3)
2002 158.85 176.32 298.53 53.21 59.06
2003 185.69 204.66 340.93 54.47 60.03
2004 215.70 238.64 403.11 53.51 59.20
2005 263.39 298.54 493.92 53.33 60.44
2006 315.01 358.20 636.15 49.52 56.31
2007 381.37 425.37 706.11 54.01 60.24
2008 494.09 571.11 979.30 50.45 58.32
2009 494.49 544.53 847.10 58.37 64.28
2010 561.33 620.20 992.25 56.57 62.50
2011 669.65 742.74 1,205.35 55.56 61.62
Source: tax revenue in 2002-2011 from Government Financial Report data

Notes : 1. for the fiscal year 2010 and 2011 tax revenue on Acquisition Duty of Right on Land and Building is excluded
2. Domestic revenue is tax revenue added with nontaxable revenue
Tax Revenue by Type of Tax

in 2002-2011
(trillion rupiah)
Non-Oil VAT & Land and

Oil & Gas Total Excluding Total Including
Building Tax &
Year & Gas Sales Tax Acquisition Duty Other Tax Income Oil & Gas Oil & Gas
Income on Luxury of Right on Land
Tax Income Tax Income Tax
Tax Goods & Building*
2002 84.40 65.15 7.83 1.47 17.47 158.85 176.32
2003 96.05 77.08 10.91 1.65 18.96 185.69 204.66
2004 96.57 102.57 14.69 1.87 22.95 215.70 238.64
2005 140.40 101.30 19.65 2.05 35.14 263.39 298.54
2006 165.65 123.04 24.04 2.29 43.19 315.01 358.20
2007 194.43 154.53 29.68 2.74 44.00 381.37 425.37
2008 250.48 209.65 30.93 3.03 77.02 494.09 571.11
2009 267.57 193.07 30.73 3.12 50.04 494.49 544.53
2010 298.17 230.60 28.58 3.97 58.87 561.33 620.20
2011 358.03 277.80 29.89 3.93 73.10 669.65 742.74
Source: Tax Revenue in 2002-2011 from state budget and Government Financial Report data
Notes : *) for the fiscal year 2010 and 2011 tax revenue on Acquisition Duty of Right on Land and Building is excluded

131
Disputes
Settlement
Tax Ratio in 2002-2011
Description 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Growth Domestic Product of Current Price (trillion rupiah) 1,821.83 2,013.67 2,295.83 2,774.28 3,339.22 3,950.89 4,948.69 5,606.20 6,436.27 7,427.09
Total Tax Revenue/Central Tax (trillion rupiah) 210.09 242.05 280.56 347.03 409.20 490.99 658.70 619.92 723.31 873.87
Local Tax (trillion rupiah) 14.55 12.09 18.69 23.32 29.40 25.06 36.94 42.89 46.03 62.10
Revenue from Natural Resources (trillion rupiah) 64.76 67.51 91.54 110.47 167.47 132.89 224.46 138.96 168.83 213.82
Tax Ratio
a. (Central tax+local tax+revenue from natural resources) 15.88 15.97 17.02 17.33 18.15 16.43 18.59 14.30 14.58 15.48
compared to GDP (%)
b. (Central tax+local tax) compared to GDP (%) 12.33 12.62 13.03 13.35 13.13 13.06 14.06 11.82 11.95 12.60
c. Central tax compared to GDP (%) 11.53 12.02 12.22 12.51 12.25 12.43 13.31 11.06 11.24 11.77
Source: GDP from Statistics Indonesia

Tax revenue in 2002-2011 from Government Financial Report data
Local tax 2011 using targeted number, source Directorate General of Fiscal Balance website
Tax Revenue by Business Field

Classification in 2010-2011
225.8912
250
178.8696
200
2011
2010
150
trillion rupiah
103.5885
82.9852
100
71.1726
68.9763
58.3317
57.9566
37.0263
33.5087
29.1365
18.7055
28.9787
24.1859
17.3429
23.0463
50
14.5225
11.7613
11.3649
9.2849
8.4211
9.9711
5.0267
2.3907
3.2338
5.1537
3.8893
3.4466
2.9305
2.1715
1.0376
1.5527
0.9974
1.3105
0.0662
0.0014
0.0013
0.0472
0
A B C D E F G H I J K L M N O P Q X Z
Source: Revenue Dashboard as of 1 June 2012
Code Business Field Classification Group Code Business Field Classification Group
A farming, hunting, and forestry J financial broker

B fishery K real estate, renting business, and company services
C mining and excavation L governmental administration, defense, and compulsory social security
D manufacturing industry M education services
E electricity, gas, and water N health services and social activities
F construction O social services and other activities
G wholesaler and retailer, car repair, motorcycle, and goods for P individual services
personal & households tools Q international institution and other extra ordinary international institution
H provision of accommodation and food & beverages X activities which unclear description
I transportation, inventory, and communication Z land and building tax

132
Tax Dispute Settlement

in 2010-2011
VAT & Sales Tax on Land & Building Acquisition Duty

Income Tax Luxury Goods Tax of Right on Land &
Description Building
2010 2011 2010 2011 2010 2011 2010 2011
Correction 2,090 3,525 3,101 6,242 7,331 6,358 2 5
Objection 805 751 558 658 6,762 3,239 7 1
Basic Tax Deduction - - - - 17,435 26,561 1 44
Deduction or Annulment of Administrative Penalties 4,595 5,562 4,961 7,338 1,550 2,203 59 3
Deduction or Cancellation of Tax Assessment 961 1,312 891 1,719 4,837 7,985 43 2
Deduction or Cancellation of Notice of Tax Collection 567 948 486 1,143 - - 56 4
Cancellation of Audit Result/Notice of Tax Assessment 9 5 18 29 - - 1,736 -
as a Result of Audit
Total 9,027 12,103 10,015 17,129 37,915 46,346 1,904 59
Database of Land and Building Tax

Object in 2007-2011
Village/ Total Sismiop Digital Map

Year Tax Object
Sub-district Village/
Sub-district % Tax Object % Village/
Sub-district %
December 2007 71,766 93,560,990 41,746 58.17 69,459,676 74.24 24,935 34.74
December 2008 74,147 97,173,501 47,958 64.68 77,230,806 79.48 31,172 42.04
December 2009 75,800 100,157,307 51,688 68.19 83,262,201 83.13 35,420 46.73
December 2010 77,033 103,562,165 55,281 71.76 89,088,086 86.02 38,798 50.37
December 2011 76,042 102,985,535 57,402 75.49 89,637,982 87.04 41,343 54.37
Note: data as of 31 December for the year concerned
(trillion rupiah)
Arrears and Payment of Income Tax Beginning Ending

Year Addition Payment Deduction
Balance Balance
and VAT/Sales Tax on Luxury Goods
2007 28.78 16.82 11.88 18.28 27.32
in 2007-2011
2008 27.32 27.39 11.26 16.37 38.34
2009 38.34 24.32 16.58 22.84 39.82
2010 39.82 56.03 18.43 57.99 37.86
2011 37.86 63.86 8.85 35.24 66.48
(trillion rupiah)
Arrears and Payment of Land and Beginning Ending

Year Addition Payment Deduction
Balance Balance
Building Tax/Acquisition Duty of Right
2007 3.80 17.87 0.89 17.74 3.92
on Land & Building in 2007-2011
2008 3.92 4.63 1.35 1.72 6.83
2009 6.83 15.27 1.79 11.93 10.18
2010 10.18 22.27 4.16 16.30 16.15
2011 16.15 38.36 3.39 34.19 20.32

133
Disputes
Settlement
DGT Employee Distribution

in 2011
Rank Group Gender Educational Level

Position Total up to
Diploma Diploma Diploma Under Post
I II III IV Men Women High Graduate
School I II III Graduate Graduate
Echelon I 1 - - - 1 1 - - - - - - - 1
Echelon II 49 - - - 49 47 2 - - - - 3 40 6
Echelon
Echelon III 525 - - 18 507 455 70 1 - - 1 36 471 16

Echelon IV 4,002 - - 3,474 528 3,328 674 268 4 8 86 1,596 2,030 10
Total of Structural Employee 4,577 - - 3,492 1,085 3,831 746 269 4 8 87 1,635 2,541 33
Account Representative 6,217 - 1,396 4,818 3 4.321 1,896 283 186 2 1,804 3,457 485 -
Structural
Treasurer 404 - 389 15 - 293 111 52 238 - 63 51 - -

Tax Bailiff 606 - 379 227 - 593 13 209 188 - 73 135 1 -
Non-Echelon
Operator Console 685 - 676 9 - 664 21 19 442 - 178 46 - -

General Staff 13,695 3 8,321 5,348 23 9,186 4,509 3,712 3,190 5 3,415 3,175 195 3
Tax Objection Reviewer 749 - 22 727 - 508 241 - - - 147 459 143 -
Total of Non-Echelon 22,356 3 11,183 11,144 26 15,565 6,791 4,275 4,244 7 5,680 7,323 824 3
Structural Employee
Grand Total of Structural Employee 26,933 3 11,183 14,636 1,111 19,396 7,537 4,544 4,248 15 5,767 8,958 3,365 36
Expert Tax Auditor Level III (highest) 270 - - 33 237 212 58 - - - - 135 133 2
Expert Tax Auditor Level II 1,156 - - 1,156 - 1,061 95 - - - 1 675 480 -
Expert Tax Auditor Level I (lowest) 1,480 - 10 1,470 - 1,389 91 - 2 - 47 1,248 183 -
Tax Auditor
Skilled Tax Auditor Level III 107 - - 107 - 94 13 31 4 - 49 20 3 -

Skilled Tax Auditor Level II 562 - 15 547 - 527 35 8 2 1 424 124 3 -
Skilled Tax Auditor Level I (lowest) 819 - 818 1 - 754 65 3 - - 575 241 - -
Total of Tax Auditor 4,394 - 843 3,314 237 4,037 357 42 8 1 1,096 2,443 802 2
Expert Appraiser Level III (highest) 1 - - - 1 - 1 - - - - 1 - -
Expert Appraiser Level II 65 - - 65 - 62 3 - - - - 42 23 -
Expert Appraiser Level I (lowest) 72 - - 72 - 54 18 - - - 1 64 7 -
Appraiser
Skilled Appraiser Level III 45 - - 45 - 43 2 22 - 14 8 1 - -

Functional
Skilled Appraiser Level II 66 - 1 65 - 61 5 26 - 1 34 5 - -
Skilled Appraiser Level I (lowest) 101 - 99 2 - 98 3 4 - - 80 17 - -

Total of Appraiser 350 - 100 249 1 318 32 52 - 15 123 130 30 -
Expert Computer Admin. Level II 5 - - 5 - 4 1 - - - - 3 2 -
Computer Administration
Expert Computer Admin. Level I 28 - - 28 - 25 3 - - - 2 24 2 -

Skilled Computer Admin. Level III 1 - - 1 - 1 - - - - 1 - - -
Skilled Computer Admin. Level II 21 - - 21 - 18 3 - - - 12 8 1 -
Total of Computer Admin. 55 - - 55 - 48 7 - - - 15 35 5 -

Expert Dentist Level III 2 - - - 2 - 2 - - - - 2 - -
Expert Dentist Level II 1 - - 1 - - 1 - - - - 1 - -
Medic
Skilled Dentist Level III 1 - - 1 - - 1 1 - - - - - -

Total of Medic 4 - - 2 2 - 4 1 - - - 3 - -
Total of Functional Employee 4,803 - 943 3,620 240 4,403 400 95 8 16 1,234 2,611 837 2
Grand Total 31,736 3 12,126 18,256 1,351 23,799 7,937 4,639 4,256 31 7,001 11,569 4,202 38

134
Employees Education and Training Number of Number of Training Total Number

Organizer of Training
Training Type Participant Hours Hours
in 2011
DGT 345 28,096 9,414 1,020,017
Financial Education & Training 341 13,200 23,927 914,502
Agency
Total 686 41,296 33,341 1,934,519
Staff in Education Assignment Education

Organizer Post Total
Diploma III Diploma IV Graduate
in 2011 Graduate
State College of Accounting 31 40 - - 71
Australian Development Scholarships - - 24* )

- -
Financial Education & Training Agency - - 80 3 83
(BPPK)
Fiscal Policy Office - - 5 - 5
Joint Japan/World Bank Graduate Scholarship - - 2 - 2
Program
Others - - 1 1 2
Grand Total 31 40 64 4 163
*) as of 13 January 2012 still in the selection process
Indonesias Tax Treaty Network No Country Effective Date
1. Algeria 1 January 2001
2. Australia 1 July 1993
3. Austria 1 January 1989
4. Bangladesh 1 January 2007
5. Belgium 1 January 1975
- Renegotiation 1 January 2002
6. Brunei Darussalam 1 January 2003
7. Bulgaria 1 January 1993
8. Canada 1 January 1980
9. China, Peoples Republic of 1 January 2004
10. Czech 1 January 1997
11. Denmark 1 January 1987
12. Egypt 1 January 2003
13. Finland 1 January 1990
14. France 1 January 1981
15. Germany
- Rep. Federal of Germany 1 January 1976
- Rep. Democratic of Germany 1 January 1988
- Union Germany 1 January 1992
16. Hungary 1 January 1994
17. India 1 January 1988
18. Iran 1 January 2011
19. Italy 1 January 1996

135
Disputes
Settlement
No Country Effective Date
20. Japan 1 January 1983
21. Jordan 1 January 1999
22. Korea, Democratic Peoples Republic of 1 January 2005
23. Korea, Republic of 1 January 1990
24. Kuwait 1 January 1999
25. Luxembourg 1 January 1995
26. Malaysia 1 January 1993
- Renegotiation 1 September 2010
27. Mexico 1 January 2005
28. Mongolia 1 January 2001
29. Netherlands 1 January 1971
- Renegotiation 1 June 1994
- Renegotiation II 1 January 2004
30. New Zealand 1 January 1989
31. Norway 1 January 1991
32. Pakistan 1 January 1991
33. Philippines, The Republic 1 January 1983
34. Poland 1 January 1994
35. Portugal 1 January 2008
36. Qatar 1 January 2008
37. Romania 1 January 2000
38. Russia 1 January 2003
39. Saudi Arabia 1 January 1989
40. Seychelles 1 January 2001
41. Singapore 1 January 1992
42. Slovak 1 January 2002
43. South Africa 1 January 1999
44. Spain 1 January 2000
45. Sri Lanka 1 January 1995
46. Sudan 1 January 2001
47. Sweden 1 January 1990
48. Switzerland 1 January 1990
49. Syria 1 January 1999
50. Taiwan 1 January 1996
51. Thailand 1 January 1983
52. Tunisia 1 January 1994
53. Turkey 1 January 2001
54. U.A.E 1 January 2000
55. Ukraine 1 January 1999
56. United Kingdom 1 January 1976
57. USA 1 February 1991
- Renegotiation 1 February 1997
58. Uzbekistan 1 January 1999
59. Venezuela 1 January 2001
60. Vietnam 1 January 2000

136
DGT Balance as of 31 December

2011 and 2010
2011 2010 Increase/Decrease

Description
(Rp) (Rp) Total (Rp) %
ASSET
Liquid Asset
Cash on Expenditures Treasurer 1,325,869,577 1,277,176,465 48,693,112 3.81
Other Cash and Equivalent to Cash 287,441,232 40,184,358 247,256,874 615.30
Tax Receivable 86,801,366,456,341 54,008,060,540,425 32,793,305,915,916 60.71
Allowance for Uncollectible Tax Receivable (46,205,692,087,023) 0 (46,205,692,087,023) 0.00
Tax Receivable (Netto) 40,595,674,369,318 54,008,060,540,425 (13,412,386,171,107) (24.83)
Non Tax Receivable 3,183,687,618 0 3,183,687,618 0.00
Allowance for Uncollectible (15,918,438) 0 (15,918,438) 0.00
Non Tax Receivable
Non Tax Receivable (Netto) 3,167,769,180 0 3,167,769,180 0.00
Current Receivable for Treasury Claims/ 654,527,261 44,721,008 609,806,253 1,363.57
Compensation Claims
Allowance for Current Receivable for Treasury (601,655,210) 0 (601,655,210) 0.00
Claims/Compensation Claims
Current Receivable for Treasury Claims/ 52,872,051 44,721,008 8,151,043 18.22
Compensation Claims (Netto)
Prepaid Expenditures 22,416,135,825 23,473,296,830 (1,057,161,005) (4.50)
Inventory 184,170,135,826 157,533,976,337 26,636,159,489 16.90
Total Liquid Asset 40,807,094,593,009 54,190,429,895,423 (13,383,335,302,414) (24.69)
Fixed Asset
Land 6,014,980,591,166 5,930,351,833,426 84,628,757,740 1.42
Equipment and Machine 3,822,116,114,333 3,637,649,330,564 184,466,783,769 5.07
Building and Construction 4,446,137,816,837 4,070,559,428,972 375,578,387,865 9.22
Road, Irrigation, and Lines 41,793,942,213 38.898.478,900 2,895,463,313 7.44
Other Fixed Asset 4,574,400,565 4,845,377,060 (270,976,495) (5.59)
Construction in Process 304,223,274,958 370,523,105,948 (66,299,830,990) (17.89)
Total Fixed Asset 14,633,826,140,072 14,052,827,554,870 580,998,585,202 4.13
Other Asset
Receivable for Treasury Claims/Compensation 8,332,014 89,375,000 (81,042,986) (90.67)
Claims
Allowance for Uncollectible- Receivable for (41,660) 0 (41,660) 0.00
Treasury Claims/Compensation Claims
Receivable for Treasury Claims/Compensation 8,290,354 89,375,000 (81,084,646) (90.72)
Claims (Netto)
Intangible Asset 235,652,806,089 188,707,143,719 46,945,662,370 24.87
Other Asset 111,775,086,480 99,136,744,568 12,638,341,912 12.74
Total Other Asset 347,436,182,923 287,933,263,287 59,502,919,636 20.66
TOTAL ASSET 55,788,356,916,004 68,531,190,713,580 (12,742,833,797,576) (18.59)

137
Disputes
Settlement
2011 2010 Increase/Decrease

Description
(Rp) (Rp) Total (Rp) %
LIABILITIES
Short-Term Liabilities
Payables to Third Parties 7,659,369,008 34,057,833,871 (26,398,464,863) (77.51)
Payables to Revenue Refund 702,376,172,734 325,301,427,558 377,074,745,176 115.91
Prepaid Revenue 0 11,500,000 (11,500,000) (100.00)
Prepaid from State Treasury Office 1,325,869,577 1,277,176,465 48,693,112 3.81
Deferred Revenue 27,735,915 12,649,358 15,086,557 119.26
Total Short-Term Liabilities 711,389,147,234 360,660,587,252 350,728,559,982 97.24
TOTAL LIABILITIES 711,389,147,234 360,660,587,252 350,728,559,982 97.24
EQUITY FUND
Current Equity Fund
Receivable Allowance 40,598,895,010,549 54,008,105,261,434 (13,409,210,250,885) (24.82)
Inventory Allowance 184,170,135,826 157,533,976,337 26,636,159,489 16.90
Allowance for Short-Term (709,775,836,425) (359,331,726,429) (350,444,109,996) 97.52
Liabilities
Goods/Services Must be Received 22,416,135,825 23,473,296,829 (1,057,161,004) (4.50)
Goods/Services Must be Delivered 0 (11,500,000) 11,500,000 (100.00)
Total Current Equity Fund 40,095,705,445,775 53,829,769,308,171 (13,734,063,862,396) (25.51)
Investment Equity Fund
Invested in Fixed Asset 14,633,826,140,072 14,052,827,554,870 580,998,585,202 4.13
Invested in Other Asset 347,436,182,923 287,933,263,287 59,502,919,636 20.66
Total Investment Equity Fund 14,981,262,322,995 14,340,760,818,157 640,501,504,838 4.46
TOTAL EQUITY FUND 55,076,967,768,770 68,170,530,126,328 (13,093,562,357,558) (19.20)
TOTAL LIABILITIES AND EQUITY FUND 55,788,356,916,004 68,531,190,713,580 (12,742,833,797,576) (18.59)
DGT Expenditures Platform and

Description Platform Realization %
Realization in 2011
Personnel Expenditures 1,437,168,405,000 1,353,986,657,961 94.21
Material Expenditures 2,765,698,083,000 2,369,802,073,990 85.69
Capital Expenditures 718,628,212,000 424,271,988,888 59.04
Debt Payment Expenditures - 1,247,399,871,387 0.00
Total 4,921,494,700,000 5,395,460,592,226 109.63
% DGT Nett Expenditures Realization in

Description 2011 2010 Increase
(Decrease)
2011 and 2010
Personnel Expenditures 1,353,986,657,961 1,226,814,761,318 10.37
Material Expenditures 2,369,802,073,990 1,427,222,820,437 66.04
Capital Expenditures 424,271,988,888 342,263,019,585 23.96
Debt Payment Expenditures 1,247,399,871,387 1,321,487,211,977 (5.61)
Total 5,395,460,592,226 4,317,787,813,317 24.96

138
2011
Annual Report
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CONTENTS
Vision, Mission, and Values 5 07 Disputes Settlement 75
Remaks by the Director General 6 Tax Disputes Settlement 76

of Taxes Case Handling in Courts other than 80
Tax Court
DGT Board of Directors 10
Services, Dissemination, and
08 83
Calendar of Events 2011 16 Public Relations
Services 84
01 DGT at a Glance 19
Dissemination 89
02 Performance 25 Public Relations 90
Key Performance Indicators 26 09 DGT in International Relations 93

Tax Revenue 32 Tax Treaty Agreement and Exchange of 94
DGT Quick Wins 2011 2012 36 Tax Information
Operational Unit Achievement 37 DGT Participation in International Fora 96
Significant Events 41 Activities of Donor Countries/Institutions 97

03
Visit by Foreign Delegations 100
National Tax Census 42
Formulation and Internalization of the 44 10 Apparatus Management 103
Ministry of Finance Values Human Resources Management 104
04 Refinement of Tax Policies 47 Employee Discipline Monitoring and 112
Enforcement
The General Provisions and Tax Procedures 48
Organizational Development 114
Provisions on Income Tax 50
Risk Management 117
Provisions on VAT and Sales Tax on Luxury 51
Goods Business Process and Information
11 119
Provisions on Land and Building Tax 51 and Communication Technology
Tax Incentives 52 Business Process Refinement 120
05 Potency Exploration 55 Development of Information and 122
Communication Technology
Extensification 56
Intensification 59 12 Statistics 127
06 Law Enforcement 63
Audit 65
Transfer Pricing Audit 68
Collection 68
Investigation 70

Annual Report 2011

Ministry of Finance of the Republic of Indonesia

Head Office
Jl. Jenderal Gatot Subroto No. 40-42

Jakarta Selatan 12190
Tel.: (62-21) 525 0208, 525 1609, 526 2880
Fax.: (62-21) 525 1245
Annual Report 2011
Call Center/Kring Pajak: (62-21) 500200

e-mail: pengaduan@pajak.go.id
www.pajak.go.id
Annual Report 2011

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Annual Report 2011

Directorate General Of Taxes

Fostering Responsibility Through Optimism

Fostering Responsibility Through Optimism

Jl. Jenderal Gatot Subroto No. 40-42

Call Center/Kring Pajak: (62-21) 500200

Annual Report 2011

Cover DJP AR-2011_ENGLISH_Final.indd 1 12/4/12 10:29 PM

Remaks by the Director General 6 Tax Disputes Settlement 76

Key Performance Indicators 26 09 DGT in International Relations 93

Significant Events 41 Activities of Donor Countries/Institutions 97

Cover DJP AR-2011_ENGLISH_Final.indd 2 12/4/12 10:29 PM

In order to achieve the self-sufficient of the nation, the Directorate

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To be a government institution that implements a

To collect tax revenue through an effective and efficient

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Assalamualaikum Wr. Wb.

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DGT participation in and contribution to various international fora, meetings, and

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Excellent achievement was proudly highlighted by DGT in 2011, namely various

Wassalamualaikum Wr. Wb.

Director General of Taxes

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Herry Sumardjito Awan Nurmawan Nuh Achmad Sjarifuddin Alsah

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A. Fuad Rahmany has been assigned the position as the Director

Dadang Suwarna Agus Hudiyono Hartoyo

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Catur Rini Widosari Amri Zaman

Dedi Rudaedi Yoyok Satiotomo

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Bambang Tri Muljanto Harry Gumelar

Wahju Karya Tumakaka Arfan

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Euis Fatimah Mekar Satria Utama

Poltak Maruli John Liberty Hutagaol

Poltak Maruli John Liberty Hutagaol has become Senior Advisor

Fostering Responsibility Through Optimism

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List of Heads of Regional Tax Offices and

No. Name Title

1. Sigit Priadi Pramudito Head of Large Taxpayer Regional Tax Office

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