The Directorate General of Taxes (DGT) made several changes in the audit process to perfect the tax audit activities in order to be in line with the bureaucratic reform. Such improvements include revitalization of business process audits that explain the effective audit process. In connection with the issuance of the Director General of Taxes Circular Letter Number SE-15/PJ/2018 regarding the Audit Policy, as for the criteria for an effective tax audit according to the Directorate General of Taxation are as follows:
- Tax Audit Completion and Disbursement from Tax Audit Process is Optimized
Tax arrears must be minimized so that the tax auditor can optimally work on tax audit for current fiscal years. For this reason, the tax audit process must be completed in accordance with the period of audit. The tax audit is considered complete if the Audit Instruction Letter (SP2) has been completed and an Audit Result Report (LHP) or a Brief LHP has been made.
Apart from that, disbursement from tax assessments issued from the results of a tax audit process must also be optimized. This is intended to achieve tax audit revenue target, as well as to minimize tax arrears.
- Minimal Legal Efforts
The quality of the tax audit must be improved further so that the results of the tax audit will be better. Thus, the tax assessment issued from the results of the tax audit are reliable and the Taxpayer accepts and pays the tax assessment results of the audit so as to minimize further legal efforts made by the Taxpayer regarding the tax assessment results. In the event that the Taxpayer makes further legal effort, tax dispute processing in the tax objection unit of the investigation, Tax Court proceedings, or compilation of memory and counter memory review of the Supreme Court become easier due to the better quality of the tax audit.
- Controlled Restitution
Controlled restitution is carried out through optimizing the initial return of tax over-payments for taxpayers who meet the criteria as stipulated in Article 17C and 17D of the General Tax Provisions and Procedures Law (UU KUP) and Article 9 paragraph (4c) of the VAT Law. For taxpayers who have been given an initial return on tax over-payments, post-audit checks can be carried out in accordance with established criteria.
In addition, controlled restitution is also carried out by allocating a Tax Auditor to conduct restitution checks on Taxpayers other than those who have been given a initial return on tax overpayments.
- Creating Sustainable Compliance
In the end, an effective tax audit must be able to create sustainable taxpayer compliance, not just temporary compliance after the tax audit process. Continuous compliance can be seen from the Income Tax Return dynamics for years after the tax audit process.