Effectiveness of Imposition of Tax Sanctions on the Compliance of Individual Taxpayers in Reporting SPT in Jayapura City

Abstract

This research is entitled as Effectiveness of Imposition of Tax Sanctions on the Compliance of Individual Taxpayers in Reporting SPT (Notification Letter) in Jayapura city. It aimed to see how effective the imposition of tax sanctions on the compliance of taxpayers in reporting SPT in Jayapura city due to the new policy stated that starting from 1 January 2008, taxpayers who have not reported their SPT or have reported their SPT containing incorrect or incomplete information and could disadvantage the country would not be punished with criminal sanctions. Instead, they will be punished with administration sanction if such failure was conducted for the first time. The mentioned administrative sanction is equal to 200% of the underpaid tax. This research used normative juridical and empirical juridical methods which collected data in the field and connected it with the relevant theories on the effectiveness of law enforcement. This research found that KPP Pratama Jayapura have not optimally enforced the administrative sanction in the form of fine towards individual taxpayers who have not reported their SPT (notification letter) due to the reason that in releasing SPT, Account Representatives (AR) still prioritize taxpayers who bring greater income to the state considering that the performance burden of AR is affected by the target work load. Based on the data of KPP Pratama Jayapura, it could be concluded that the level of compliance of the taxpayers in reporting their annual SPT from 2015 to 2017 did not increased as there is legal uncertainty in the imposition of sanctions towards taxpayers which makes disobedience from taxpayers. The factors that inhibit the implementation of sanctions are (1) the absence of awareness and low knowledge of taxpayers regarding their tax obligations; (2) the range of control between the residence of the taxpayer with the tax service office which results in the need for a large budget in the case of notification / collection of tax administration fines; and (3) taxpayer identity is invalid which make it difficult for officers to send the SPT to taxpayers. Researchers suggested that a model for applying tax sanctions is required in order to conform to the principles of tax law.

Keywords: Imposition, Tax Sanctions, Annual SPT, Jayapura

DOI: 10.7176/JLPG/83-17

Publication date: March 31^st 2019