Foreign Consultant Dominant, IAW Highlights The Process Of Procurement Of Crossmarks That Are Considered Discriminatory

Beliax (pixabay)

JAKARTA The beliax project, which has been relied on as the main motor of reforming the national tax system, is considered to be facing fundamental problems that occurred long before the implementation stage began. Indonesia Audit Watch (IAW) stated that failures did not only arise in the implementation phase, but were rooted in design errors and potential conflicts of interest in the pre-planned phase as well as the appointment of consultants.

IAW's Founder Secretary, Iskandar Sitorus, assessed that the initial phase was actually the most crucial point but had minimal supervision. At that stage, a blueprint, technology selection, and consultants will oversee the trillions of rupiah project.

"This is where crucial decisions such as technology selection and project supervisors are set, which directly affect the fate of this giant project," said Iskandar in Jakarta, Wednesday, December 3.

He explained that the beliax project has a strong legal basis, namely Presidential Regulation Number 40 of 2018 concerning the Revised Tax Administration System. The regulation is used as a foothold for the 2018'2024 tax reform roadmap and is included in the Ministry of Finance's strategic plan. One of the main concepts of this project is the use of the Commercial Off-The-Shelf (COTS) system, which is said to be more quickly implemented and lower risk.

According to Iskandar, the Ministry of Finance reasoned the need for global consultants under the pretext of human resource capacity gaps, the need for adoption of OECD practices, time pressure, and project complexity. However, the results of the IAW analysis show that there is actually a document preparation that tends to be discriminatory and leads to competition restrictions.

Technical specification is made very high and has the potential to make it difficult for local consultants. There are certain proprietary technical terms as well as extreme qualification requirements, such as experience in five countries and a portfolio of at least 100 million US dollars. This can only be effectively met by foreign consortiums," said Iskandar.

Of the 27 companies that registered for prequalification in 2019, only eight passed, all of them were foreign consortiums or national companies that depended on foreign technology partners.

In the next process, the government appointed PricewaterhouseCoopers (PwC) as a procurement agent with a contract of IDR 89.7 billion and Deloitte as a quality guarantor with a contract of IDR 110.3 billion. According to IAW, the two appointments were made without competitive tender.

"Direct appointments with special expertise and urgent needs actually make the country have the potential not to get the best value for money," he said.

IAW also highlighted the track records of the two companies. PwC has been hit by tax scandals in the UK and Australia, while Deloitte has been sanctioned by the Ministry of Finance for failing to detect fraud in the financial statements of SNP Finance in 2012 2016.

The IAW investigation concluded the biggest obstacle to the beliax sourced from the initial design, quality assurance errors, and the preparation of specifications that were not optimal. This happened long before the CNSQualysoft LG system integrator started working.

"The Minister of Finance, Purbaya, should have understood from the start. Now, he actually blames the integrator system as the only party responsible," said Iskandar.

IAW recommends a number of corrective steps, including investigative audits by the BPK, evaluation of compliance with the SPBE Presidential Regulation in the beliax architecture, independent cybersecurity audits by BSSN, and the formation of independent teams across ministries and institutions. IAW also asked the government to review PwC and Deloitte contracts and strengthen national capacity in the procurement of strategic IT projects.

"Coretax is not just an information technology project, but the backbone of the nation's administration and fiscal justice," said Iskandar.