REGULATORY APPROACHES TO THE LEGAL PROTECTION OF TAX CONSULTANTS IN INDONESIA AS PROFESSIONAL INTERMEDIARIES

Abstract

Tax consultants in Indonesia work in a lot of legal grey areas, and even when they follow professional standards, they can still be held criminally responsible.  This study examines inadequacies in Indonesia's criminal law protections for tax consultants and advocates for legal reforms to achieve a more equitable balance between law enforcement and professional security.  Based on Agency Theory and Compliance Theory, the research uses a mixed-method design that includes normative legal analysis, case reviews of 20 prosecutions from 2020 to 2024, and interviews with 38 stakeholders. It finds that consultants are often prosecuted for client misconduct without clear legal intent or enough legal protections.  A comparative analysis of six emerging economies Brazil, Mexico, India, Malaysia, Thailand, and the Philippines indicates that Indonesia has the least consultant protection, lacking legal privileges, safe harbour provisions, or tiered enforcement strategies.  Current rules focus on following procedures but don't do enough to protect people's rights, which has led to a "defensive practice culture" where 45% of consultants avoid high-risk clients because they are afraid of being prosecuted.  The study calls for a two-part legal reform: first, adding constitutional protections, and second, passing a Tax Consultant Protection Act that includes professional privilege, immunity for good-faith actions, and fair enforcement standards. These steps are meant to help you tell the difference between getting legal advice and doing something wrong on purpose. They will make the law clearer, hold professionals accountable, and make the tax system better.