Tax collection is crucial for Indonesia’s income, funding various development programs and supporting fiscal sustainability. Given its importance, the government is taking steps to achieve the 2024 tax goal of IDR 1.989 trillion.
As known, tax revenue is a key income source for running economic activities and public services in Indonesia. Yon Arsal, an expert at the Ministry of Finance, highlights a challenge: next year’s uncertain global situation.
“While we recognize this as a distinct challenge, it prompts us to explore avenues for maintaining budgetary stability and distribution functions. Consequently, the formulation of revenue and expenditure postures demands a prudent approach,” he remarked during the Fintalk Series: The Role of Zakat as a Tax Reducer, as quoted from YouTube Baznas TV on Wednesday (22/11/2023).
Global uncertainties affect Indonesia’s international trade, slowing exports and lowering global commodity prices. Import-related taxes, like import Value Added Tax (VAT), fell by 5.8% from January to September 2023. Customs duties also decreased by 78.1% by September 2023 due to global commodity price dynamics.
To address these challenges, the government is reforming its tax system, aiming to meet revenue targets and strengthen finances. Initiatives include improving taxpayer compliance and expanding the tax base, such as syncing the National Identification Number (NIK) with the Tax Identification Number (NPWP).
The Directorate General of Taxes (DJP) is preparing the Core Tax Administration System (CTAS), scheduled for mid-2024. CTAS automates various tax processes, streamlining tax notices, document processing, payments, and collections.
Aligned with Presidential Regulation No. 40/2018, CTAS is a technology upgrade for more efficient tax administration. It aims to boost taxpayer compliance and the tax ratio gradually.
According to the October 2023 State Budget report, tax revenue has reached IDR 1,389 trillion, exceeding 80.8% of the initial tax goal. This reflects the government’s commitment to navigate fiscal challenges with resilience and foresight.
