| 4. In which ways is the initiative creative and innovative?
In terms of operational activities, Local Technical Taskforce Unit has been delegated to deal with all aspects related to the efforts of improving the local-tax management.
In terms of IT-based service integration, the strategies implemented include the use of VPN system linking the whole payment service to Bank of Jawa Barat and Banten (BJB), allowing the chance of improvement of service acceleration and security. The use of security printing also ensure the lowest level of document falsification cases.
The ISO 9001: 2008 certification obliges the institution to hold the internal audit twice a year and to hold a Management Review Meeting to evaluate quality objectives achievements. Every 6 months, surveillance audit is held by the British Standards Institution (BSI) intended to prove that the system has been implemented in conformity with the established procedures.
In terms of securing the local tax revenues, the Office of Local Revenues and Fiscal Management cooperates with the District Attorney of Cilegon to resolve tax-related legal issues or taxation disputes and facilitate the tax collecting process to the taxpayers who are in arrears despite the prior persuasive efforts made. This move is conducted as the final step to mediate the taxpayers to immediately fulfil their obligation.
To increase the awareness of fulfilling the tax obligation of the taxpayers residing in rural and township areas, the Office of Local Revenue and Fiscal Management involves the neighborhood and residence apparatus forum. The apparatus not only distribute the tax notification but also collect the payment and disseminate the information about the benefit of the tax revenue for society ii the form of the funding of Pro-Society Programs including:
1. Development Program in Education Field
a. Extending educational coverage and service for all level
b. Providing greater support to develop the religious education
2. Development Program in Employment Field
a. Encouraging the regional and local investment
b. Setting up qualified human resources.
c. Implementation of basic territorial infrastructure development using labor intensive method
d. Building automotive workshop infrastructure
3. Development Program In Health Field
a. Expanding the Free Health Services
b. Improving facilities and infrastructure
c. Expanding the Health Insurance coverage
d. Improving the Quantity and Quality of Health Workers.
e. Improving health education through promotional and preventive efforts
4. Development Program in Economic Field
a. Restoration of Uninhabitable Housings (RTLH)
b. Direct Aid for Society
c. Funeral Grant
d. BPJS-Integrated Local Health Insurance
e. Capital Assistance for RTS.
f. Honorarium for independent Cilegon charity workers
| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The list of stakeholders involved in the implementation of the system include the following:
1. Ministry of Finance, Ministry of Law and Human Rights - Regional Office of Banten province, the Ministry of Internal Affairs, Bureau of Law – Government of Banten Province;
Providing assistance in evaluating the local regulation drafting on local tax matters
2. Primary Tax Office of Cilegon
Providing assistance in the transition process of property tax and excise on Acquisition of Land and Buildings.
3. DPKAD (Office of Local Budgeting) of Banten Province
Providing assistance in facilitating the transition stages of property tax.
4. Legislative Council of Cilegon
Approving the Regional Regulation on local taxes.
5. Associated Local Government Agencies of Cilegon (Division of Administration Affairs and Division of Legal Affairs of Local Secretariat of Cilegon City)
Providing assistance in evaluating the local regulation drafting on local tax matters and facilitating the establishment of the Local Technical Taskforce Unit on Tax Affairs
6. State Attorney Office of Cilegon
Providing assistance in resolving the legal problems of local taxes linkages, as well as mediating the active collection efforts on delinquent local taxpayers.
7. National Land Affairs Agency of Cilegon
Providing assistance in reconciling the data of property tax objects
8. Bank of Jawa Barat and Banten
Provide the linkage on-line payment system and designated as local payment point.
9. Indonesian Notaries Association - Branch Cilegon
Providing assistance in the process of tax acquisition for Excise on Acquisition of Land and Building
10. Neighborhood and Residence Apparatus Forum (Foker-C),
Assisting the property tax collection and disseminating Local Government program funded by the results of local tax revenue
11. Journalists and Media Coverage
Providing assistance in the reporting, notifying, and socializing the linkages to local tax exposure on local media
| 6. How was the strategy implemented and what resources were mobilized?
The funding for the innovation derived from Local Budget of Cilegon City. And to support the implementation of the program are applicable also involve other agencies, in the form of grants of goods (infrastructure) Printronix printer from BJB Branch Cilegon, servers, and placement of personnel in Local Technical Taskforce Unit on Tax Matters for property tax payment; and infrastructure leasing of Printronix printers (2 pieces) from Primary Tax Office of Cilegon. To finance the implementation of the Innovation good preparation facilities and infrastructure, procedures, capacity building of staff, the total cost would be around IDR 1 Billion, but the cost is much smaller than the benefits taken.
In terms of technical management, the service operation is assisted by 2 (two) Local Technical Taskforce Unit (UPTD) on Tax Matters, consisting of 1 (one) Head of Division, 3 (three) Section Chief (Data Collection, Validation, and Billing) and 2 (two) Unit Chief. The legal foundation for the operational activities are Cilegon City Local Regulation No. 3 Year 2013; Regulation oof Mayor No.23 Year 2013; and ISO 9001: 2008 Document No. Rev.01 Year 2013.
To support the technical implementation of the local tax services assisted by employees in accordance with the qualification that have been set as follows:
• 4 (four) Console Operators and 4 (four) Appraisers, holding 1st Degree Diploma from STAN (State College of Accountancy)
• Executors who have participated in various training and/or technical workshop on local tax held by government institutions such as STAN, Ministry of Finance, Ministry of Internal Affairs, Provincial Training Agency, and Local State Apparatus Agency of Cilegon
• 6 (six) executors who have been in internship at Primary Tax Office of Cilegon for the period of 6 months.
| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
With some of the strategies and initiatives that have been implemented through the tax reform area (of the people by the people for the people) local tax issues can be resolved include:
1. During the period of January 2014 - September 2014 no procedure-related and the service friendliness complaint has been filed as the procedures and quality of service has been standardized in ISO 9001: 2008.
2. In 2014, the time needed for printing-related activities only take 5 minutes of service.
3. Services are not only provided at DPPKD office, but also provided at 2 (two) UPTD-Local Tax Offices, covering the geographical distance of 7-10 km, resulting in the decrease of transportation cost.
4. With the implementation of IT-based systems, communities are able to get the information online, without having to come directly to the office.
5. With the help of field service personnel, problems of around 60,000 taxpayers residing in the township can be served with a local tax delivery service.
6. In 2014, the taxpayers are able to pay their tax obligation without any time boundaries due to the 24-hour non-stop service and the easiness to make the payment at all branches of BJB al over Indonesia.
7. Property Tax Taxpayers-P2 are able to gain information about their up-to-date tax billing. Leakage rate in the Level-1 Property Tax in 2014 could be reduced to 0% due to the application used as a social control for tax revenues.
8. In 2014, monitoring of tax revenue can be determined in real time by the leadership as policy makers.
9. In 2014, self-assessment tax system managed to accomplish the timely delivery of SPTPD, due to SMS reminder from SMS gateway service and Delivery Service conducted by the Field Officer.
10. In 2014, the number of delinquent taxpayers can be reduced to 90% due to the cooperation with the State Attorney Office of Cilegon.
11. Security Printing feature has help reduce the number of tax document forgery or falsification.
12. There have been significant improvement of Factual Local Tax Ratio to Expected Local Tax until 2014, as in August 2014, the increase reached 59.11% (the factual number was IDR 161,140,960,949 from the expected amount of IDR 272,634,195,710)
13. Satisfactory Index of Local Tax Service in Cilegon City in 2013 reached the level of 85.74% increased by 16.20% compared to the index in 2012 amounted to 69.54%.
| 8. What were the most successful outputs and why was the initiative effective?
Monitoring mechanism in the system is an innovative application that can be done daily by the government of Cilegon City in order to conduct the controlling function by doing on-going-basis database backup. The stakeholders are able to review such process through the compiled data from the system.
In addition, monitoring and evaluation is done regularly and continuously for all the management in order to improve the services in the future. Tri-monthly evaluations are also done to the officials and helpers, ensuring the security of the collection process and qualified service for taxpayers.
In order to guarantee the Quality of Service with the implementation of a procedure ISO 9001: 2008 all components of the services in the field of local tax are subject to internal audits twice a year. Management Review Meeting is also conducted to evaluate quality objectives achievements. Beside, every six months, the surveillance audit is done, conducted by the British Standards Institution (BSI) intended to prove that the system has been implemented in conformity with the established procedures.
To ensure the satisfactory index on the quality of the service, annual survey is done by the Office of Local Revenues and Fiscal Management in collaboration with Cilegon City Local Secretariat Agency. Furthermore, to receive reports or complaints of service rendered by local tax officials, the office opens the hotline number of (0254) 392967.
To deal with all tax-related legal issues and problems, the DPPKD Office routinely holds a meeting with State Attorney Office of Cilegon. To measure the success of collection of property tax and excise on the acquisition of land and building, the DPPKD office holds a routine meeting with officials from Primary Tax Office of Cilegon. Every three months, the DPPKD officials holds a meeting with Commission 2 of Local Legislative Council to carry out evaluation on the tax revenue as well as evaluating the local tax management, creating a basis for determining the target for local revenue and expenditure.
Another evaluation done for the implementation of the process is the monthly meeting led by the Head of the office. To enhance the apparatus capacity, the DPPKD office hold annual Character Building activities.
| 9. What were the main obstacles encountered and how were they overcome?
Several obstacles arisen from the innovation include the following:
1. The lack of understanding of dynamic working environment and working pattern based on the latest Standard Operating Procedures;
2. The limited understanding of the taxpayers in fulfilling their tax obligation;
3. The state of readiness to welcome and deal with globalization and technological era among societies in most rural areas;
4. Centralized services at the local tax offices, causing the accumulated workload and slow work-pace;
5. The state of controlling regulation on tax-related matters.
To overcome the above problems, The DPPKD office performs some steps below as solutions and answer to the existed problems:
1. To improve the understanding of local tax officials, the DPPKD office conducts technical workshop, training, technical improvement course, socialization, Standard Operational Procedures linkage to local tax services.
2. To improve the taxpayers’ understanding about the tax-related issues, the DPPKD office conduct the media socialization.
3. Field service officers provide extra service by visiting the taxpayers in rural and/or industrial area in person.
4. To reduce the accumulated working-load and to accelerate the time of service, the DPPKD office formed 2 (two) Local Technical Taskforce Unit on Tax Matters, each serving 4 (four) districts.
5. To accelerate the prompt, accurate, responsive, and efficient, the Head of the office delegates several authorities including the provision of information and Tax Subject and Object Validation.