Coretax Reported to KPPU, Alleged Tender for Procurement Too Exclusive Becomes the Spotlight IAW 

JAKARTA - Indonesian Audit Watch (IAW) has filed a public complaint to the Competition Oversight Commission (KPPU) regarding the Coretax project of the Directorate General of Taxes (DJP).

Not only highlighting the disruption of the tax system, IAW suspects there are problems related to the design of the state's strategic project market. The main focus is on the alleged tender structure which is considered too exclusive and only revolves around certain global firms.

"We are not complaining about bugs or software errors. We are complaining about how the market was formed before Coretax started," said IAW Founder Iskandar Sitorus to reporters, Friday, May 15.

IAW assessed that the competition was formed from the beginning of the Coretax project. In IAW's search for public documents and official DJP newsletters in 2020, there were three global firms that were said to be in the initial orbit of the Coretax project, namely PricewaterhouseCoopers, Deloitte, and KPMG.

PwC is said to have played a role as a procurement agent. This position is considered strategic because it is involved in the preparation of specifications, tender design, qualification, and project evaluation process.

Meanwhile, Deloitte serves as the Owner's Agent for Project Management and Quality Assurance, while KPMG is listed as a participant who passed the qualification stage.

"What we question is not who they are. What we question is, from the beginning, were the requirements and the design of the tender made in such a way that only these firms could enter?" said Iskandar.

IAW assessed that the position of the procurement agency held by PwC has the potential to create a conflict of interest in the perspective of business competition.

"Procurement agents can influence the form of competition, qualification, even the short list of participants. If this position is occupied by a global firm that is in the same methodology ecosystem, the risk of structural conflicts of interest is high," he concluded.

Not only did it postulate the alleged violation of Article 19 on discrimination and Article 22 related to tender collusion in Law Number 5 of 1999, IAW also highlighted Article 24 related to hindering the business of competitors.

According to Iskandar, the design of the tender using a certain methodology has the potential to make national actors eliminated even before the competition begins.

"If the national actors are structurally unable to enter, it is not a loss of competitiveness. It is eliminated before the competition. Article 24 is appropriate to test this situation," he said.

To strengthen its report, IAW also included a number of findings from the Financial Audit Agency (BPK), ranging from weak integration of tax applications, high dependence on vendors, low transfer of knowledge to internal human resources, to significant changes in project scope.

"BPK has long been sounding the alarm about the governance of TI taxation. If the market structure is unbalanced from the start, it is normal for disturbances to occur again. The problem is not just technical, but the original design," said Iskandar.

IAW reminded that the Coretax issue not only concerns budget efficiency but also concerns the sovereignty of the national fiscal system.

"Don't let us build the backbone of the country's finances with a process that is unhealthy from the start. This is not just about money, this is about sovereignty," he concluded.