Customs Officials in KPK Crosshairs

[pantaiema]

She travels all over Indonesia on weekly basis. She only meets her husband only for 2-3 days a week. She got travel allowance, meal allowance, transportation allowance, education allowance that allows her to continue her study. Her meal allowance doubles when she travels and that is outside her travel allowance. She also gets position allowance (or what we call tunjangan jabatan). That counts for the additional income.

Indeed per diem for any Indonesian civil servant who is away on duty is high compared to their counterpart in private employment. Let alone if it is compared to the civil servant in developed world based on the percentage of basic salary.

Keep in mind, this is just per diem/subsistence. The accommodation has been paid for. For the daily meals, it is highly likely they get free meals from the hosts / meeting organisers. Similarly, to any local transportations, most likely they are all sorted by the hosts. This is a standard hospitality which is attached to Indonesian culture.

So no wonder an Indonesian civil servant who travel a lot might have aggregated per diem more than their own basic salary. Examples of these are customs officials, auditors, manpower trainers/instructors, etc.

 

[Samoerai]

Indeed per diem for any Indonesian civil servant who is away on duty is high compared to their counterpart in private employment. Let alone if it is compared to the civil servant in developed world based on the percentage of basic salary.

Keep in mind, this is just per diem/subsistence. The accommodation has been paid for. For the daily meals, it is highly likely they get free meals from the hosts / meeting organisers. Similarly, to any local transportations, most likely they are all sorted by the hosts. This is a standard hospitality which is attached to Indonesian culture.

So no wonder an Indonesian civil servant who travel a lot might have aggregated per diem more than their own basic salary. Examples of these are customs officials, auditors, manpower trainers/instructors, etc.

But those per-diem-allowances are taxed, right?

 

[jstar]

No, official trevel expenses, whether it’s reimbursement or a lump sum, are not subjected to PPH21.

Of course a lump sum or prepayment, which is rather standard here even in the private sector, is rather antiquated and it leads to ‘misuse’. You get a bit the effect you see in western countries of someone who is allowed to fly business class but switches to economy to take the family also. Obviously that can not be the purpose which is that the employee is well taken care of and will not be tired etc.

 

[pantaiema]

But those per-diem-allowances are taxed, right?

TBH I am not quite sure about this. Out of curiosity, I try to find out this is the response

But if it is taxed, like employees in Band III/a+ I reckoned it must be taxed at source (e.g the employers business), as I do know that per diem is cash in hand they will get every time they travel. The cash is expected to be spent, so I do not think the government could recover part of the money through tax mechanism from individual who get the cash and has spent the money.

I understand it if you are a civil servant no other income you do not submit the tax return. How many civil servants in Indonesia ? How many of them know how to calculate the tax based on PPH21 ? It is unreasonable to expect every single of them to submit the tax return.

Also keep in mind not many of Indonesians civil servants are customs officials, auditors, manpower trainers/instructors, etc who need to travel across Indonesia very often. If you do not travel, you do not get it.

 

[pantaiema]

Translation of regional regulation for government employees (PNS):

The salary components of civil servants are: Basic salary, Family Allowance, Position Allowance/Certain Functional Allowance/General Functional Allowance, Rice Allowance and PPh Allowance Article 21.

The basic salary amount has been determined in the salary table, adjusted to the work process and the group. For example, a Civil Servant Group III/a with a working period of 7 years, the amount of basic salary is 2,696,200. For Civil Servants Group III/b with a working period of 12 years, the amount of basic salary according to the salary table is 3,84.200.

Family Allowance, for civil servants who are married, husband/wife allowance and child allowance (maximum 2 children) whose amount is 10% and 2% of the basic salary, respectively.

Position/structural allowances are given to civil servants who head an organizational unit or lead a work unit. The amount of job allowance for Echelon 4A is 540,000, Echelon 3B 980,000, Echelon 3A 1,260,000 and Echelon 2B 2,025,000 and so on.

Certain Functional Allowances are given to a group of positions that contain functions and tasks related to functional services based on certain skills and skills (there are 42 types of functional positions), for example, education personnel, health workers, archivist and others. The amount of allowance is different for each position, distinguished based on expertise and expertise, and given based on the appointment decision of the authorized official. For example, for teachers with group IV, the amount of allowance is 389,000.00, for nurses the amount of allowance is 850,000.00.

General Functional Allowance is given to civil servants who do not receive position/structural allowances or certain functional allowances. The amount of allowances for groups I, II, III and IV are 175,000, 180,000, 185,000, and 190,000 respectively.

Rice allowance is given to officials and their families in the form of money as much as 10 kg/person, and the price of rice is currently set at 7,242.00 per kilogram. For a husband/wife and 2 children, the amount of the rice allowance is 289,680.00 (4 souls x 10 x 7,242.00).

Tax deduction…. etc.

This is another 2022 version from CNBC

Pangkat Golongan PNS Serta Besaran Tunjangan Terbaru 2022

Anda harus paham bahwa negara memberikan gaji dan tunjangan PNS sesuai pangkat golongan

www.cnbcindonesia.com

Use Google translate to translate it.

 

[jstar]

TBH I am not quite sure about this. Out of curiosity, I try to find out this is the response

But if it is taxed, like employees in Band III/a+ I reckoned it must be taxed at source (e.g the employers business), as I do know that per diem is cash in hand they will get every time they travel. The cash is expected to be spent, so I do not think the government could recover part of the money through tax mechanism from individual who get the cash and has spent the money.

I understand it if you are a civil servant no other income you do not submit the tax return. How many civil servants in Indonesia ? How many of them know how to calculate the tax based on PPH21 ? It is unreasonable to expect every single of them to submit the tax return.

It is very straightforward. See Pasal 6 paragraph Nomor 4… travel expenses are not considered compensation for work. It is deducted from gross income.

Same for state officials and civil servants.
(At the time this Regulation of the Minister of Finance came into force, Decree of the Minister of Finance Number 636/KMK.04/1994 concerning the Imposition of Income Tax for State Officials, Civil Servants, Members of the Armed Forces of the Republic of Indonesia, and Pensioners on Income Charged to the State Finance or Finance Region, revoked and declared null and void.)

 

[pantaiema]

It is very straightforward. See Pasal 6 paragraph Nomor 4… travel expenses are not considered compensation for work. It is deducted from gross income.

View attachment 3148
Same for state officials and civil servants.
(At the time this Regulation of the Minister of Finance came into force, Decree of the Minister of Finance Number 636/KMK.04/1994 concerning the Imposition of Income Tax for State Officials, Civil Servants, Members of the Armed Forces of the Republic of Indonesia, and Pensioners on Income Charged to the State Finance or Finance Region, revoked and declared null and void.)

I have not learnt about taxation in ID in detail. But from your post presumably that tax deduction is at source, so it is the duty of employers to deduct it.
This makes sense otherwise employers in private sectors will use a winding way to avoid income tax. They could pay their employees a minimum wage and give the rest as allowances. The end result for an employee is the same but the company save money from taxation.

 

[Samoerai]

I only asked because the allowances are so much more than the basic salaries, it would be normal that higher than a threshold those allowances, summed up, are taxed, like in most European countries.

 

[flavus]

Speaking of taxation, one of the weird things in Indonesia is that, in the private sector, it's common to negotiate a fixed take home pay rather than a fixed gross base pay.

 

[rabbit_39]

It is very straightforward. See Pasal 6 paragraph Nomor 4… travel expenses are not considered compensation for work. It is deducted from gross income.

View attachment 3148
Same for state officials and civil servants.
(At the time this Regulation of the Minister of Finance came into force, Decree of the Minister of Finance Number 636/KMK.04/1994 concerning the Imposition of Income Tax for State Officials, Civil Servants, Members of the Armed Forces of the Republic of Indonesia, and Pensioners on Income Charged to the State Finance or Finance Region, revoked and declared null and void.)

Your interpretation is not quite correct. For companies, these are the expenses that can be deducted from the taxable income therefore reducing the amount of corporate taxes it has to pay. However for individuals, the individual income tax (PPh 21) will tax all income.

While the company is responsible for withholding the taxes and then reporting the withholding, the individuals are responsible to self-report once a year and any taxes due from that calculation will be reduced by the amount that is already paid through the withholdings.

"What is Article 21 in Indonesia income tax?
Income Tax Article 21 is a tax deducted from income in connection with work, services, and activities carried out by Domestic Individual Taxpayers (WP), namely income in the form of salaries, wages, honorarium, allowances, and other payments with any name and form."

 

[jstar]

Your interpretation is not quite correct. For companies, these are the expenses that can be deducted from the taxable income therefore reducing the amount of corporate taxes it has to pay. However for individuals, the individual income tax (PPh 21) will tax all income.

While the company is responsible for withholding the taxes and then reporting the withholding, the individuals are responsible to self-report once a year and any taxes due from that calculation will be reduced by the amount that is already paid through the withholdings.

"What is Article 21 in Indonesia income tax?
Income Tax Article 21 is a tax deducted from income in connection with work, services, and activities carried out by Domestic Individual Taxpayers (WP), namely income in the form of salaries, wages, honorarium, allowances, and other payments with any name and form."

Nope. It is always a deduction from the gross income. The travel cost is excluded from the PPh, according to the Regulation of the Minister of Finance number 262/PMK.03/2010.

Look here for instance:

Berita :: BIAYA PERJALANAN DINAS (LUMPSUM ATAU REIMBURSEMENT) BUKAN OBJEK PPH 21

bppk.kemenkeu.go.id

And esp. this paragraph:

Sehingga seharusnya terhadap Biaya Perjalanan Dinas bukanlah merupakan Objek Pajak Penghasilan Pasal 21 bagi karyawan/pegawai yang menerimanya karena menurut pasal 6 ayat 1 Undang-Undang PPh, pembayaran oleh pemberi kerja sehubungan dengan biaya perjalanan dinas dianggap bukan sebagai imbalan berkenaan dengan pekerjaan dan terhadap biaya yang dikeluarkan oleh perusahaan dapat dijadikan sebagai pengurang penghasilan bruto (pasal 6 ayat 1 Undang-Undang Pajak Penghasilan).


So that the Expenses for Official Travel are not Article 21 Income Tax Objects for employees/employees who receive them because according to Article 6 paragraph 1 of the PPh Law, payments by employers in connection with business travel expenses are considered not as compensation in relation to work and for expenses incurred issued by the company can be used as a deduction from gross income (article 6 paragraph 1 of the Income Tax Law).

 

[Samoerai]

There is a new scandal which is reminiscent of the corrupt Rafael having a bored son Mario who kicks a boy into a coma over a girl:

View attachment 3023

A video went viral, it shows the abuse by the son of a middle ranking police officer named Achiruddin Hasibuan, against a student in North Sumatra.

It seems the father was present and did nothing to stop it. But that’s not all and you guessed it; now they discovered father and son have a huge amount of money on their bank accounts and daddy runs an illegal solar system business on the side. While his tax returns do no match these activities. (Privacy is non-existent in this country.)

View attachment 3024

He’s been put on non-active and the bank accounts are blocked. The Professional and Security Sector (Propam) of the North Sumatra Regional Police is investigating the case.

I think the trial is on tv today and as I understand - my wife is translating - the health insurance company will not cover the hospital bills of the boy in coma. Because, this boy started the fight, allegedly

 

[pantaiema]

I think the trial is on tv today and as I understand - my wife is translating - the health insurance company will not cover the hospital bills of the boy in coma. Because, this boy started the fight, allegedly

As I understand it, the insurance initially refused to cover the cost after the hospital (or Insurance) get informed by the Regional Policemen that the victim started the fight first which voids the insurance. Also after the hospital (or Insurance) was informed it was only a mild instead of heavy prosecution.

The cost which is already amounted close to Rp1b is finally confirmed to be covered by the insurance. The special regenerative treatment, eg "stem cell" will not be covered. The walking aids, training equipments at home helping him to learn walking will only be partly covered. This was confirmed by the the victim's father who testified in front of the court.


It is shown in minutes : 0:45-2.25
I think it is a suicidal mission if the insurance company denied the claim after the case gets full attention by the public and covered by the main media, social media. There are a lot of images, video clips are displayed by the main media that could be used against them. Also after the case is taken over by the Metropolitan/National Police.

The case is actually not that big to deserve a full attention by the public as it is just involving a few teenagers. But reading between the lines, there is something enormous on the background is happening here which attract public, media attention. Not to mention after the case was discovered it was also linked to mega corruptions cases involving many customs officials.

They are trying to cover up the case in attempt to resolve the case using "restorative justice" preventing the case to go to the court, and get full public attention. The process of covering up might involve the offender parents colluding with the regional policemen, who supposed to be in the front line of the justice. Never mind the role of insurance company trying to dismiss the claim.

 

[pantaiema]

To answer this question, you will need to answer this question first.
"Why there are so many people want to become a civil servant in Indonesia?.

If you see in any national job advertisement for civil servants there are so many applicants and only very few get accepted.

The answer is if you add all of the allowances their income is competitive, if not better than other alternatives in non public sector. Not to mention job security, pension, insurances and other privileges which are not available to non civil servants.

The job security of Indonesian civil servants is incomparable to job security you see in developed world. They will only get fired for very serious misconduct, and augmented with relentless criticisms from public as the result of the case being revealed by the press and social medias. The process is very lengthy. During Suharto regime the civil servant were one of his key winning strategy to get Re-elected. The civil servant must vote the party who always nominate Suharto as the Indonesian president, making him the sole candidate in any presidential election.

The amount of allowances they get is incomparable to civil servants allowance in the developed world. So when a person assumes the basic salary is the income they get and start comparing it with the civil servant in developed world, that is where the confusion will come from.

This is another reason why there are so many Indonesians Citizen want to become civil servants. It is difficult to understand for people coming from developed world and thus try to compare them with Indonesian civil servants. It is difficult to understand for those who do not understand the dynamics behind the civil servants in Indonesia.


Jokowi Upset there are so much taxpayer's money has been wasted by the civil Servants. It is mostly wasted on official travel expenses, additional income, bureaucracies for the civil servants.

Other things that have been mentioned previously:

• Comparable (if not better) income than income in many (if not majority) of private employment
• It is not uncommon that their allowances exceed their basic salary
• Job security. It is very difficult to get fired and the process of dismissal is very lengthy. This is a long story and tradition of the Suharto's regime using Civil Servants as a vehicle to get re-elected and was always a single presidential candidate with no opponent.
• Typically, it is a less stressful job. It is a public knowledge, that it is not uncommon, they are taking their family, wives, children to go shopping during the office hours.
• Although it is understood it is their jobs, but there are a lot of opportunities to earn extra income working as an independent agent/consultant or work together with professional agents/consultants.

Keep in mind apart from the civil servant working in state departments there are also a lot of other employees working for state-owned enterprises with quite similar status and opportunities to earn extra income.

But for the same reasons some Indonesians people who consider themselves competitive to earn much more income anywhere else in private sectors, developed their own businesses, working abroad in highly skilled job in the developed world do not want to become a civil servant and/or work for the state-owned enterprises in Indonesia.

 

[flavus]

It is difficult to understand for people coming from developed world and thus try to compare them with Indonesian civil servants

Not necessarily all the developed world, I think a civil service job is quite desirable in France too (and used to be in the UK?)

 

[pantaiema]

Not necessarily all the developed world, I think a civil service job is quite desirable in France too (and used to be in the UK?)

I never say the civil servant is not desirable in Indonesia. In fact, in Indonesia, many people want to become civil servants for the reasons I mention above. Differentiate it with those who are competitive and have talent to work in highly paid jobs for multi national companies, or developed their own businesses.

In Europe, in the UK, in France or wherever in the developed world they do not have as many allowances or opportunities to earn extra cash in hand like their counterpart in Indonesia. Similarly to job security I don't know any civil servant jobs in developed world that could match Indonesian civil servant jobs security. In Indonesia once you are in it is quite similar to job for life.

That is why for those who see the Indonesian civil servant solely from their basic salary get it wrong thinking they are underpaid.

 

[flavus]

I never say the civil servant is not desirable in Indonesia. In fact, in Indonesia, many people want to become civil servants for the reasons I mention above. Differentiate it with those who are competitive and have talent to work in highly paid jobs for multi national companies, or developed their own businesses.

In Europe, in the UK, in France or wherever in the developed world they do not have as many allowances or opportunities to earn extra cash in hand like their counterpart in Indonesia. Similarly to job security I don't know any civil servant jobs in developed world that could match Indonesian civil servant jobs security. In Indonesia once you are in it is quite similar to job for life.

That is why for those who see the Indonesian civil servant solely from their basic salary get it wrong thinking they are underpaid.

That's not what I meant. I meant that in some developed world, being a civil servant is also very desirable similar to in Indonesia, for many of the same reasons (though mostly job security and guaranteed pensions -- sometimes even the opportunity for corruption but in a more indirect way).

I was responding to the claim that people from developed world won't understand -- people from some developed world countries definitely understands why a civil servant job is desirable!

 

[serious_fun]

I was responding to the claim that people from developed world won't understand -- people from some developed world countries definitely understands why a civil servant job is desirable!

It's known as "The Iron Rice Bowl" for a reason.

Re: Customs officers, we finally had our first bad experience: one of the boxes that we had shipped here, which had been pulled aside and checked by customs, arrived at the destination. Damaged box with broken contents including objects completely destroyed, bent beyond recognition, etc. The contents had obviously been removed and just haphazardly thrown back into the thrashed box. (Nothing was missing.) Luckily none of the items were expensive or irreplaceable, but it was a real sign of disrespect. This was not accidental unless the box had fallen off of a moving truck or thrown from a height of 5+ metres.

Anyway, it was only the first time, so we'll be thankful.

 

[snpark]

Or inspected for drugs

 

[Bob]

It's known as "The Iron Rice Bowl" for a reason.

Re: Customs officers, we finally had our first bad experience: one of the boxes that we had shipped here, which had been pulled aside and checked by customs, arrived at the destination. Damaged box with broken contents including objects completely destroyed, bent beyond recognition, etc. The contents had obviously been removed and just haphazardly thrown back into the thrashed box. (Nothing was missing.) Luckily none of the items were expensive or irreplaceable, but it was a real sign of disrespect. This was not accidental unless the box had fallen off of a moving truck or thrown from a height of 5+ metres.

Anyway, it was only the first time, so we'll be thankful.

How do you know it was Customs and not a courier issue?