Measuring the urgency of tax administration reform  in Indonesia

Andi Derma Purba; Roy Valiant Salomo

doi:10.21744/irjmis.v11n1.2401

Authors

Andi Derma Purba
andi.derma@ui.ac.id
University of Indonesia, Jakarta, Indonesia
Roy Valiant Salomo University of Indonesia, Jakarta, Indonesia

Keywords:

tax abuse, tax administration, tax ratio, tax reform, taxpayers

Abstract

This research aims to explore the latest developments in taxation and describe why Indonesia must implement tax reform. The primary focus is on the state revenue generated by the tax sector over the last ten years, tax ratios, and the extent of the state's losses due to tax abuse in Southeast Asia. The research uses a constructive philosophy and paradigm with a qualitative approach. It employs explanatory research, with library research as a data collection technique. The findings indicate that significant measures are required to reform Indonesia's tax administration to increase state revenues from taxes, raise the tax ratio, and reduce the amount of state losses due to tax abuse. The complex tax administration system leads to tax avoidance and abuse, reducing the state's revenue and causing the tax ratio to be low. The government needs to organize the workings of the tax system using the principles of equality, simplicity, and justice. The research results are addressed to the government as regulators and policymakers, as well as to taxpayers and the public as policy implementers. Taxpayers and the public can comply with their tax obligations without hesitation because the tax system is strong, credible, and accountable.

Downloads

Download data is not yet available.

References

Adam, C. V., Seran, S., Kerihi, A. S. Y., & Libing, Z. S. (2023). Bureaucracy reform in tax services online in the Kupang City. Natapraja, 11(1), 1-14.

Bassey, E., Mulligan, E., & Ojo, A. (2022). A conceptual framework for digital tax administration-A systematic review. Government Information Quarterly, 39(4), 101754. https://doi.org/10.1016/j.giq.2022.101754

Bosquet, B. (2000). Environmental tax reform: does it work? A survey of the empirical evidence. Ecological economics, 34(1), 19-32. https://doi.org/10.1016/S0921-8009(00)00173-7

Casal, S., Kogler, C., Mittone, L., & Kirchler, E. (2016). Tax compliance depends on voice of taxpayers. Journal of Economic Psychology, 56, 141-150. https://doi.org/10.1016/j.joep.2016.06.005

Chindengwike, J., & Kira, A. R. (2022). The Effect of Tax Rate on Taxpayers' Voluntary Compliance in Tanzania. Universal Journal of Accounting and Finance, 10(5), 889-896.

Chongvilaivan, A., & Chooi, A. (2021). A Comprehensive Assessment of Tax Capacity in Southeast Asia. Asian Development Bank.

Darma, S., Ismail, T., Zulfikar, R., & Lestari, T. (2023, September). Tax Avoidance Towards Tax Ratio After Tax Amnesty Program. In Proceedings of the International Conference on Sustainability in Technological, Environmental, Law, Management, Social and Economic Matters, ICOSTELM 2022, 4-5 November 2022, Bandar Lampung, Indonesia.

De Neve, J. E., Imbert, C., Spinnewijn, J., Tsankova, T., & Luts, M. (2021). How to improve tax compliance? Evidence from population-wide experiments in Belgium. Journal of Political Economy, 129(5), 1425-1463.

Denzin, N. K., & Lincoln, Y. S. (Eds.). (2011). The Sage handbook of qualitative research. sage.

Emran, M. S., & Stiglitz, J. E. (2005). On selective indirect tax reform in developing countries. Journal of public Economics, 89(4), 599-623. https://doi.org/10.1016/j.jpubeco.2004.04.007

Erawati, T., & Wibowo, R. A. (2023). Religiusitas Kualitas Pelayanan dan Etika Penggelapan Pajak. Ekonomis: Journal of Economics and Business, 7(1), 183-188.

Erizal, J., Supriyono, B., Santoso, B., & Domai, T. (2022). Improving the Indonesian Taxation System using Tax Amnesty’s Policy. WSEAS Transactions on Business and Economics, 19, 876-884.

Gnangnon, S. K., & Brun, J. F. (2019). Trade openness, tax reform and tax revenue in developing countries. The World Economy, 42(12), 3515-3536.

Graham, J. R., & Mills, L. F. (2008). Using tax return data to simulate corporate marginal tax rates. Journal of Accounting and Economics, 46(2-3), 366-388. https://doi.org/10.1016/j.jacceco.2007.10.001

Holdroyd, I., Barton, G., & Holdroyd, D. (2023). The effect of working tax credits on child maltreatment rates: a systematic review. Child Abuse & Neglect, 143, 106279. https://doi.org/10.1016/j.chiabu.2023.106279

Hwang, S., & Nagac, K. (2021). Religiosity and tax compliance: Evidence from US counties. Applied Economics, 53(47), 5477-5489.

James, S. (2009). Tax and non-tax incentives and investments: evidence and policy implications. FIAS, The World Bank Group.

Keen, M., & Slemrod, J. (2017). Optimal tax administration. Journal of Public Economics, 152, 133-142. https://doi.org/10.1016/j.jpubeco.2017.04.006

Kemenkeu. (2023). Laporan Kinerja Kementerian Keuangan Republik Indonesia Periode 2013 – 2022 (Gedung Djuanda I, DKI Jakarta). Kementerian Keuangan Republik Indonesia. www.kemenkeu.go.id

Lee, D. N. (1976). A theory of visual control of braking based on information about time-to-collision. Perception, 5(4), 437-459.

Lombardo, R., Camminatiello, I., D'Ambra, A., & Beh, E. J. (2021). Assessing the Italian tax courts system by weighted three-way log-ratio analysis. Socio-Economic Planning Sciences, 73, 100870. https://doi.org/10.1016/j.seps.2020.100870

Marshall, C., & Rossman, G. B. (2014). Designing qualitative research. Sage publications.

Meutia, I. F. (2017). Reformasi administrasi publik.

Muslichah, M. (2015). The effect of tax simplification on taxpayers' compliance behavior: religiosity as

Network, T. J. (2020). The State of Tax Justice 2020: Tax Justice in the time of COVID-19. Tax Justice Network.

OECD. (2023). Revenue Statistics 2023: Tax Revenue Buoyancy in OECD Countries. OECD.

Palil, M. R., Hamid, M. A., & Hanafiah, M. H. (2013). Taxpayers Compliance Behaviour: Economic Factors Approach. Jurnal Pengurusan, 38.

Panjaitan, F., Nurmaini, S., & Partan, R. U. (2023). Accurate Prediction of Sudden Cardiac Death Based on Heart Rate Variability Analysis Using Convolutional Neural Network. Medicina, 59(8), 1394.

Richardson, L., & St Pierre, E. (2008). A method of inquiry. Collecting and interpreting qualitative materials, 3(4), 473.

Rusli, R., Oviedo-Trespalacios, O., & Abd Salam, S. A. (2020). Risky riding behaviours among motorcyclists in Malaysia: A roadside survey. Transportation research part F: traffic psychology and behaviour, 74, 446-457.

Saad, N. (2012). Tax non-compliance behaviour: Taxpayers view. Procedia-Social and Behavioral Sciences, 65, 344-351. https://doi.org/10.1016/j.sbspro.2012.11.132

Samonte, Q. S. (1970). Student activism and national development: The Philippine setting. The Journal of Educational Thought (JET)/Revue de La Pensée Éducative, 161-173.

Sari, D., & Qibthiyyah, R. M. (2022). Tax Revenue and Income Inequality: A Provincial Level Evidence. Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 6(2), 155-172.

Shanahan, M. E., Austin, A. E., Durrance, C. P., Martin, S. L., Mercer, J. A., Runyan, D. K., & Runyan, C. W. (2022). The association of low-income housing tax credit units and reports of child abuse and neglect. American journal of preventive medicine, 62(5), 727-734. https://doi.org/10.1016/j.amepre.2021.11.020

Sinaga, H. D. P. (2018, July). Reorientation of Tax Legal Certainty in Indonesia: An Exploration of Transcendental Law. In 1st International Conference on Indonesian Legal Studies (ICILS 2018) (pp. 282-287). Atlantis Press.

Tazkiyannida, A., & Hidayatulloh, A. (2023). Determinan Penggelapan Pajak: Sudut Pandang Wajib Pajak Orang Pribadi. JAK (Jurnal Akuntansi) Kajian Ilmiah Akuntansi, 10(1), 99-109.

Yunas, N. S. (2018). Tax System Reform Policy Design through E-Taxation In Indonesia: Learning On The Success Of Tax System Reform In Japan. CosmoGov: Journal of Governmental Science, 4(1), 71-89.