Indonesian Government’s Struggle to Save Budget: A Legal Perspective

By: Dr. Iman Sjahputra, SH., Sp.N., LL.M.

Recently, we can see many companies trembled in the balance due to the United States Dollar currency instability and the dramatic drop on the oil price in international market. Indonesia as the oil-importer country has been hit also, hardly, largely on its foreign exchange, making further adjustments on the national budget seems quite reasonable or even necessary. Various attempts have been conducted by the government to increase income to avoid deficit in expenditure. However, it seems that these efforts still see no chance of success anytime soon.

Increasing Tax Income

As one example, we may say that the government’s attempt to discuss the Draft of Law for Tax Amnesty (“Draft”) has been obstructed by the House of Representative (“HoR”) in the form of postponement for further discussion on the ground of possibility of such Draft to harm the people and against impartiality. HoR claimed that the Draft is more beneficial to particular party, specifically those which obtained their wealth unlawfully.

The criteria of whether the acquired wealth is legal or illegal itself are still not sufficiently clear and requires further accurate vindication. In current practice, reversed burden of proof is used to prove whether a person’s wealth is legal or illegal. The owner of such wealth has to prove it themselves if such wealth is obtained legally by also proving the origin of such wealth. However, in practice, it is not hard for people to circumvent this discourse since the option to claim that such wealth is obtained legally e.g. by inheritance or grant is always available. Moreover, the possibility of furnishing such claim with notarial deed strengthening the proof is also widely accessible. Furthermore, a notarial deed has kekuatan pembuktian autentik (authentic burden of proof) which cannot be claimed conversely, in absence of court decision.

Battling Corruption

Another approach by the government to increase income is the classic attempt to fight corruption. The Corruption Eradication Commission (“KPK”) as the specific institution formed to fight corruption has successfully gained public’s trust to be one of the most trusted public institutions in Indonesia by the arrest of several large and high profile corruptions. However, the role of the KPK is also further challenged. The role of KPK which is authorized by the Law No. 30 Year 2002 (“KPK Law”) in tapping communication lines, arrest and detainment begins to be disputed. Several parties with specific interest start to seek for the amendment of the current KPK Law aiming to weaken such KPK Law on the ground of abuse of power by KPK as an extraordinary government law enforcement body. It is claimed that today nothing can challenge the power of KPK and hence, KPK is prone to abuse of power, except that there is limitation on the KPK Law. To them, the establishment of supervisory body supervising KPK’s role and power; the necessity of court order as a requirement to tap communication lines and the existence of independent investigators deemed to be crucial to ‘balance’ the power of KPK, which to them, is already too broad.

However, the above claim is not in accordance with the people’s opinion on the KPK. The majority of the people are in the opinion that the KPK is the most effective body to capture the roaming ‘rats’ and the limitation to KPK’s role and power is unacceptable. The establishment of a supervisory body above KPK and independent investigator will surely restraint KPK’s independency. The requirement of court order for tapping and arrest is also alleged to be furnished with conflict of interest. Not to mention that until today, the courts still be regarded as prone to judicial mafia and such court order may be easily postponed or obstructed. That would be the reason that the people still see the postponement of the amendment of KPK Law, which contains various limitations, as the right decision, but the question still remains, for how long?

The above are some example of the government’s highly challenged attempt to strengthen the national economy. Despite of the fact that there are still a lot of parties trying to weaken the government’s attempt to avoid deficit for their personal interest, we shall still put hopes and trusts in the incumbent government that they will fight and struggle their best for the good of the people.