Directorate General of Taxes:An Excellent Government InstitutionWith Excellent Research Capabilities
“If we can measure it, we can manage it.
If we can manage it, we can achieve it.”
A. The Glooming Facts
According some academic literatures, there are a number of indicators that illustrate the
fact about national taxes in Indonesia, including : (a) tax ratio in indonesia is still relatively low
compared to other countries, (b) the filling ratio is allegedly low, (c) the elasticity of tax
collection is still greater than one, (d) the distribution of tax revenue is still concentrated on too
few tax payers. In addition, another academic literature concluded that the main problem of the
tax administration is its weakness on tax law enforcement. The weakness is shown by (a) a low
number of income tax return that claims profit, (b) a low number of registered taxpayers, and (c)
a high number of uncollected tax arrears. On top of that, the other academic literature had
revealed that a large tax gap is found.
B. Where Do We Go?
According to those findings, judging from a self-assessment system point of view, there
two things that might not already attained in Indonesia. Firstly, taxpayers not have a high level of
voluntary compliance of the tax responsibilities prescribed by the constitution and law yet,
and/or secondly the DGT fail to provide a proper guidance to taxpayers on how to file their tax
returns correctly and to perform sort of tax examinations to check the compliance level of
taxpayers.
Consequently, as Indonesia adopts a self-assesment system for its national taxes, DGT
must strive to resolve the condition mentioned above. In line with that, specifically, in 2004
DGT has been summarized four strategic goals to achieve its mission and vision, they are: (a)
improving the quality of tax service, (b) improving the level of tax payers compliance through
law enforcement, (c) improving the organizational effectivity and efficiency through reformation
and modernization, and (d) improving the human resources professionalism and integrity.
If DGT persist in achieving those strategic goals, we simply believe that there is a time
where the tax payers completely satisfied with the service quality of DGT’s operational activities
and the level of taxpayer’s voluntary compliance definitely high. It is therefore available an
optimal main source of government funding with vigorous fiscal sustainability and the high
level of trust in Indonesia’s tax system. Concisely, this is our ideal of DGT.
C. Why Research Capabilities?
One of big emerging question is what we need initially to achieve DGT’s strategic goals.
As we all know, tax can be seen from many aspects including, economics, law, sociology, and
psychology. Respectively, we simply put “tax knowledge” in the top list among others. In this
context, we can define “tax knowledge” as all facts, information, certain understanding,
awareness or familiarity gained by experience of a fact or situation related to taxation. Through
this tax knowledge, we can formulated the type of the problem occurred, predictions and
prescriptions, recommendations, controls, and evaluations toward implementation of DGT’s
strategic goals. Related to one of the main duties of DGT , tax knowledge will also help DGT to
formulate its policy accurately.
It is therefore essential that DGT should have quantitative and qualitative data as basis
for its operational plans and overall strategic goals, by performing vigorous tax research
capabilities. In this essay, we simply define tax research as any systematic effort to increase the
stock of “tax knowledge”. This includes therefore any systematic process of critical investigation
and evaluation, theory building, data collection, analysis and codification related to taxation. The
results of these tax research can provide useful information for DGT as revenue collecting
authorities and have implications for tax policy development.
Due to our best knowledge, research is still a rare activities in DGT nowadays.
By :
Arifin Rosid-Malang-Indonesia
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