ISSN 2289-8506 Global Journal of Business and Social Science Review journal homepage: www.gjbssr.org GJBSSR, Vol. 4(1), October - December 2015: 242-249 The Effect of Tax Inspection in Compliance With Taxpayers Pay Income Tax (Income Tax article 25) Case Ctudy on Tax Office Pratama Tampan Pekanbaru* Atika Zarefar1*, Arumega Zarefar2, Andreas3 1 Lecturer, Department of Accounting, Polytechnic Caltex of Riau-28265, Pekanbaru, Indonesia Lecturer, Department of Accounting, Faculty of Economic, Riau University-28293, Pekanbaru, Indonesia 2, 3 ABSTRACT Objective – The purpose of this study is to determine the effect of tax inspections of compliance in the corporate taxpayers pay income tax in particular article 25 of income tax on Tax Office (KPP) Pratama Pekanbaru Tampan. Methodology/Technique – The object of this study is the taxpayers who examined his or Tax Assessment Letter (SKP) published in 2012. There are 17 corporate that used as a sample of this research. The method that using to analyse is a descriptive quantitative method. Findings – The results of this study demonstrate that there is no influence of the tax inspections for compliance in the corporate taxpayers pay income taxes, especially income tax article 25. Novelty – In this research, we finding that assessment which did by tax officer not influence the compliance of the corporate taxpayers. This is not in line with the object of doing an assessment. Type of Paper: Conceptual Keywords: Tax inspections, compliance, income tax article 25, descriptive quantitative method __________________________________________________________________________________ 1. Introduction Generally there are no people who are glad on paying taxes, because the tax is an expense without direct remuneration (UU no. 36, 2008). So that taxpayers tend to try to pay the least possible taxes and tax evasion (tax avoidance) as long as it is within the rules (loop holes). As a consequence, for the conservative principles of business entity are the limited opportunities to maximize profits reported. This resulted in a conflict of interest between the company and users of financial statements to encourage the use of policies to manipulate financial information unilaterally. This is certainly an impact on tax reporting cases. If we look from the fiscal side, the role of taxation is very important for the state revenues to finance state expenditures, both for routine expenses, as well as development expenditure (budgetary function). The greater the tax paid by the company's the greater revenue that country * Paper Info: Revised: September, 2015 Accepted: December, 2015 * Corresponding author: E-mail: atika@pcr.ac.id Affiliation: Accounting, Polytechnic Caltex of Riau ISSN 2289-8506 © 2015 GATR Enterprise. All rights reserved. Atika Zarefar, Arumega Zarefar and Andreas can receive. Because of the importance of the contribution of taxes in state revenue, the taxpayer has a role and a great responsibility in implementing the provisions of the Law of Taxation with all its implementing regulations. In order to improve taxpayer compliance (WP) as part of efforts to secure tax revenues and refer to the Strategic Plan of the Directorate General of Taxation (DGT) 2010-2014 and the achievement of Key Performance Indicators (KPI) in 2012, DJP need to optimize the delivery of the Notification letter (SPT) through the submission of tax return compliance policies in 2012. One of them is to establish the size of the submission compliance ratio of notification letter (SPT) Income Tax (Annual Income Tax) in 2012 of at least 62.50%. (DGT, 2012). In the present study, the researchers chose to study the case in Tax Office (KPP) Pratama Pekanbaru Tampan looking and focused on the corporate taxpayers. The reason the researchers chose to study the case in Tax Office Pratama Pekanbaru Tampan is as Tax Office Pratama Pekanbaru Tampan is the Tax Office which operates most closely with researchers. While there are two reasons researchers focused on company taxpayers, first because the company income tax including a large contributor of tax revenue inTax Office Pratama Pekanbaru Tampan. It can be seen from the greater contribution of income tax paid by the company compared to the income tax paid by individuals. The second reason is because of a smaller percentage of income tax revenue attainment from company taxpayers (Tax Article 25) when compared to the percentage achievement of individual income tax revenue. It can be seen from table 1 below. Tabel 1. Net Tax Revenue Tax Office Pratama Pekanbaru Tampan Per 31 December 2011 Plan 2011 (APBNP) (Rp.) Net realization (Rp.) Achievement (%) a.5. Income tax article 25/29 Individual 7,350,450,565 13,653,914,289 185.76% a.6. Income tax article 25/29 Institution 76,277,636,776 41,234,356,519 54.06% Types of tax A. Income Tax Source: Data MPN 10 January 2012 From the above table, it demonstrates that the receipt of the company taxpayer (Article 25/29) is a large reception at the Tax Office Pratama Pekanbaru Tampan, but instead, the percentage of realization is far below its planning. The percentage of tax revenue from corporate taxpayers (Article 25/29) in 2011 only reached 54.06% or below half of planning revenues in 2011. 2. Review of Literature 2.1 Income Tax article 25 Income Tax (abbreviated as PPh) imposed on the taxpayer in a given period called a tax year. Based on this, the calculation and income tax calculation is done once a year as outlined in the annual tax return. Because the income tax calculation is done once a year, then this calculation should be done after one year of the end so that all the data of income in one year is known. In this way, the amount of income tax payable of course that must be paid will be known when a tax year has ended. In order for the tax payment is not done at once which would be burdensome, then made the mechanism of tax payment in advance or repayment every month. Instalment payments or instalment is called the Income Tax Article 25 (PPh article 25). (Mardiasmo, 2008). The instalment of Income Tax Article 25 shall be calculated in accordance with the provisions. In general, how to calculate the income tax based on the Article 25 Data SPT previous year. That is, we assume that earnings this year equal to the income the previous year. Of course there will be a difference with the actual condition when the tax year is now over. The 243 | P a g e GJBSSR, Vol. 4(1), October - December 2015: 245-249 Atika Zarefar, Arumega Zarefar and Andreas difference is exactly what we pay a year-end tax deficiency. Underpayment end of the year usually called Tax Article 29. If the difference indicates an overpayment that called Tax Article 28, then this condition is called Taxpayers requesting refunds or tax overpayment that has been done, (Gunadi, 2009). In general, this tax installment amounts payable based to the Income Tax Income Tax SPT last year reduced by tax credits Income Tax Articles 21, 22, 23 and 24, divided by 12, or the number of months in the part of the tax year. For example, SPT 2007 showed the following data: Income tax payable 50,000,000 Income Tax Credit Articles 21, 22, 23 and 24 35,000,000 Thus, article 25, 2008 to be paid each month is as follows: Income tax payable 50,000,000 Income Tax Credit Articles 21, 22, 23 and 24 35,000,000 Difference 15,000,000 Tax Article 25 = 15,000,000: 12 = 1,250,000 Income Tax Article 25 for the months before the deadline for submission of their annual tax return is equal to the income tax under Article 25, the last month of the tax year ago. If the tax year is the calendar year (January to December), it is a few months before the deadline for submission of their annual tax return is January and February. Thus, Tax Article 25 in January and February 2008 is equal to Income Tax Article 25 December 2007, (Gunadi, 2009). If in the current year issued Tax Assessment Letter (SKP) for the preceding taxable year, then the amount of tax installment is recalculated based SKP and apply from the following month after the publication of SKP. 2.2 Tax Compliance According to Simon James et al cited by Gunadi (2005), the idea of tax compliance is the taxpayer has a willingness to meet their tax obligations in accordance with the applicable rules without the need for the holding of the tax audit, investigation thorough, warnings, or even threats and sanctions legal or administrative. A notification letter is a letter by the taxpayer is used to report the calculation and/ or payment of taxes, taxes and/ or non-taxable income and/ or assets and liabilities in accordance with the provisions of tax legislation. (Gunadi, 2005). 2.2.1 Types of Tax: 1. Notification Letter – Period (SPT-Masa) Notification Letter-period is a letter by the taxpayer is used to report the calculation and payment of the tax payable or in a tax period or time. 244 | P a g e GJBSSR, Vol. 4(1), October - December 2015: 245-249 Atika Zarefar, Arumega Zarefar and Andreas 2. Notification Letter – Annual (SPT-Tahunan) Notification Letter- Annual is a letter by the taxpayer is used to report the calculation and payment of tax payable in a tax year. The deadline for submission of notification letter is: 1. For the Notification Letter – Period, no later than 20 days after the end of the tax period, Unless the deadline for submission of SPT - Future income tax Article 22 Imports that is 14 days after the end of the tax period. 2. For the Notification Letter of Annual Income Tax Return individual taxpayer, no later than three months after the end of the tax year. 3. For the Notification Letter of Annual Income Tax corporate taxpayer, at the latest four months after the end of the tax year. Notification Letter is considered not submitted if: 1. Notification Letter is not signed. 2. Notification Letter is not fully enclosed information and / or documents that have been set. 3. Notification Letter of the claimed overpayment delivered after three years after the end of the tax period, part of the fiscal year or fiscal year, and the taxpayer has been reprimanded in writing, or 4. Notification Letter submitted after the Directorate General of Taxation checks or issuing tax assessments. 2.3 Tax Audit Tax audits is a series of activities to seek, collect, process data or other information to verify compliance fulfilment of tax obligations and for other purposes in order to implement the provisions of the tax legislation. (Mardiasmo, 2008) Compliance testing compliance with tax obligations: a. Notification letter (SPT) overpayments and losses. b. Notification letter (SPT) no or late delivered. c. Notification letter (SPT) meets specified criteria the Director General of Tax to be examined. d. indications not fulfilled obligations other than the obligations to the letter. e. Indications of unfulfilled obligations other than the obligations to the letter. 2. Another objective, namely: a. Giving Tax identification number (TIN). b. Elimination TIN. c. Inauguration PKP in position and confirmation or revocation of the inauguration of PKP. 245 | P a g e GJBSSR, Vol. 4(1), October - December 2015: 245-249 Atika Zarefar, Arumega Zarefar and Andreas d. Taxpayers file an objection or appeal. e. Collecting material for the preparation of Net Income Calculation Norm. f. Matching the data or information tools. g. Determination of the taxpayer located in a remote place. h. The determination of one or more places subjects to VAT. 3. Research Methodology 3.1 Research Object The population in this study are all Tax Assessment Letter (SKP) of company taxpayers issued by the Tax Office Pratama Pekanbaru Tampan in 2010, and the compliance of company taxpayers one year before and one year after the tax audit conducted by the Tax Office Pratama Pekanbaru Tampan in 2010. 3.2 Type and Source of Data The source of data used in the study come from internal sources and the secondary data. Secondary data such as tax compliance reports and results of tax assessment letter of company taxpayers published in 2010 in Tax Office Pratama Pekanbaru Tampan. 3.3 Data Collection Methods Data collection methods used by researchers are as follows: 3.3.1 Documentation Researchers collected data by writing the documents related to tax compliance board and other data such as data Tax assessment letter of company taxpayers, published in 2010, well an assessment letter on tax underpayment (SKPKB), an assessment letter on tax underpayment extra (SKPKBT), an assessment letter on tax overpayment (SKPLB), or an assessment letter on tax nil (SKPN) required in this study. 3.3.2 Literature study Literature study is conducted with the aim to obtain a theoretical basis through literature, books, reports, lecture notes, articles, papers, journals, and other sources that are relevant in connection with the issues discussed related to the existing problems and useful in this thesis for the resolution. 3.4 Operational Definitions 3.4.1 Tax Audit Tax audit is judging by the number of Tax Assessment Letter (SKP) of company taxpayers issued by Tax Office Pratama Pekanbaru Tampan in 2010. Tax Assessment Letter (SKP) published consisted of an assessment letter on tax underpayment (SKPKB), an assessment letter on tax underpayment extra (SKPKBT), an assessment letter on tax overpayment (SKPLB), and an assessment letter on tax nil (SKPN). 246 | P a g e GJBSSR, Vol. 4(1), October - December 2015: 245-249 Atika Zarefar, Arumega Zarefar and Andreas 3.4.2 Compliance of company taxpayers Compliance of corporate taxpayers can be seen from the data of compliance of company taxpayers for the type of income tax article 25 (PPh article 25), which can be seen from the data of tax payment slip (SSP) Tax Article 25 accepted on Tax Office Pratama Pekanbaru Tampan one year before and one year after the tax audit in 2010. 3.5 Data Analysis Method The research is quantitative descriptive. Quantitative research is done by finding the percentage of compliance of company taxpayers on a monthly basis over a period of 2 years, i.e. one year before the examination and one year after tests carried out in 2010 by Tax Office Pratama Pekanbaru Tampan. Then the percentage obtained, the researchers compared the percentage of compliance obtained a year before and after the tax audit, if there are significant changes to the compliance of payment/ reporting of income tax paid by the Article 25 (PPh article 25) of company taxpayers on Tax Office Pratama Pekanbaru Tampan with a hearing in 2010. Acknowledgements After the researchers calculate percent of compliance each corporate, data that researchers found is as follows: 1. The level of tax compliance in paying income tax article 25 in May decreased by 11.5%% (47 %% - 35.3%) after the examination. 2. The level of tax compliance in paying income tax article 25 in June decreased by 23.3% (58.8% - 35.5%) after the examination. 3. The level of tax compliance in paying income tax article 25 in July decreased by 47.1% (76.5% - 29.4%) after the examination. 4. The level of tax compliance in paying income tax article 25 in August decreased by 29.4% (70.6% - 41.2%) after the examination. 5. The level of tax compliance in paying income tax article 25 in September decreased by 23.5% (64.7% - 41.2%) after the examination. 6. The level of tax compliance in paying income tax article 25 in October decreased by 29.4% (58.8% - 29.4%) after the examination. 7. The level of tax compliance in paying income tax article 25 in November decreased by 23.6% (53% - 29.4%) after the examination. 8. The level of tax compliance in paying income tax article 25 in December decreased by 35.3% (64.7% - 29.4%) after the examination. 9. The level of tax compliance in paying income tax article 25 in January increased by 23.6% (53% - 29.4%) after the examination. 10. The level of taxpayer compliance in paying income tax article 25 in February increased by 29.4% (47% - 17.6%) after the examination. 11. The level of tax compliance in paying income tax article 25 in March increased by 41.2% (53% - 11.8%) after the examination. 12. The level of tax compliance in paying income tax article 25 in April increased by 23.5% (47% - 23.5%) after the examination. 247 | P a g e GJBSSR, Vol. 4(1), October - December 2015: 245-249 Atika Zarefar, Arumega Zarefar and Andreas Based on the results of data analysis in the previous discussion, it can be concluded that the tax period May to December levels of compliance of taxpayer company after the tax audit has declined when compared with the level of compliance before the tax audit in 2010, while the tax period January to April the level of compliance of taxpayer company after tax audit have greater than before when compared to the level of compliance before the tax audit in 2010. 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