Gov’t Readies Core Tax System to Modernize Tax Services

Minister of Finance Sri Mulyani Indrawati delivers a press statement following a limited meeting on the core tax system development at the Presidential Palace Complex in Jakarta, Wednesday (07/31). (Photo by: PR of Cabinet Secretariat /Rahmat)

The Government has announced it is developing a Core Tax System to automate and digitalize tax administration services.

“This afternoon, Director General of Taxes and I reported the implementation of the Core Tax System development at the Directorate General of Taxes (DJP). The President has issued Presidential Regulation Number 40 of 2018 on Core Tax Development to enable the DJP to continue improving reliable IT base and data,” Minister of Finance Sri Mulyani said at the Presidential Palace Complex following a limited meeting on core tax administration system led by President Joko “Jokowi” Widodo in Jakarta, Wednesday (07/31).

According to Sri Mulyani, the core tax system is inseparable from the rising number of taxpayers and documents that must be processed by the tax system.

“It aligns with the increasingly great challenges as the number of our taxpayers rose from 33 million to 70 million and the number of documents that must be processed by our tax system also grew accordingly. For instance, our e-invoice number more doubled from 350 million documents to 776 million documents,” she said.

The Minister also underscored the importance of developing the tax IT system and database, pointing out that her Ministry has designed the tax system reform since 2018 by adopting the Commercial off the Shelf (COTS) system, which is adopted by many countries to build a reliable tax system.

The Minister also stated that the core tax system would improve the automation and digitalization of tax administration services, enabling taxpayers to obtain services independently and fill out tax return forms automatically, as well as enhancing transparency for taxpayers.

“Taxpayers can see the 360-degree review of their entire tax information. There will be faster, more accurate, and real-time services. The legal enforcement oversight can also be more accurate and fairer,” she said, adding that the DJP will have more credible data and an integrated network and can make informed and data-driven decisions.

This measure, Sri Mulyani said, will increase taxpayers’ compliance and the tax ratio for tax revenues.

“We have conducted multiple tryouts with 21 business process modules that vary based on the cluster scope, covering services and data collection, data analytics, legal oversight and enforcement, and the supporting system,” she remarked. (KS/DNS) (DH/EP)