Taxation serves as the backbone of a nation’s revenue, and an efficient tax administration system is vital for ensuring optimal collection. For many years, the Directorate General of Taxes (DGT) in Indonesia relied on fragmented information systems, which often led to challenges in data integration, service efficiency, and supervision.
To address these issues, the DGT launched the Coretax administrative system, which is designed to provide greater convenience for taxpayers. Its development forms part of the Tax Administration System Reform Project (Proyek Pembaruan Sistem Inti Administrasi Perpajakan/PSIAP). PSIAP is a comprehensive initiative to redesign tax administration business processes through the implementation of a Commercial Off-the-Shelf (COTS)-based information system, accompanied by the enhancement of the national tax database. The primary objective of Coretax is to modernize Indonesia’s tax administration system. It integrates all core tax administration processes, including taxpayer registration, tax return filing, tax payments, as well as tax audit and collection activities.
What is Coretax?
Coretax is a modern, integrated tax administration system developed to replace the DGT’s outdated and fragmented systems. The project aims to:
- Unify all DGT business processes, from taxpayer registration, reporting, and payment to audits and collection into a single integrated platform [2].
- Enhance Services for taxpayers through a more accessible and user-friendly digital platform. Taxpayers can perform various tax-related activities online, reducing the need for physical visits to tax offices.
- Increase work efficiency for DGP employees. With an integrated system, manual tasks are minimized, and data can be accessed quickly for analysis and supervision.
- Improve taxpayer compliance through ease of access and transparency, as well as more effective data-driven supervision.
The Coretax system leverages cutting-edge technology, including artificial intelligence and data analytics, to detect potential non-compliance and risk more accurately. This marks a paradigm shift from a manual-focused administrative approach to a data-driven and technology-enabled one.
Integrated e-Filling and e-Billing Services
A concrete example of Coretax is the integration of e-filing and e-billing services. Before Coretax, taxpayers had to use different systems to generate a billing code and file their Annual Tax Return (Surat Pemberitahuan Tahunan/SPT). With Coretax, all these services will be seamlessly connected, allowing taxpayers to complete both payment and reporting within one integrated workflow.
For Instance, the Coretax system will integrate data from various external sources, such as banks, government agencies, and e-commerce platforms. This allows the DGT to automatically validate taxpayer reporting data and detect discrepancies. If a taxpayer reports income that does not align with their bank transactions or recorded purchases, the system can provide an early warning for follow-up. This significantly improves the accuracy and effectiveness of tax audits.
The launch of Coretax is a strategic and transformative step for tax administration in Indonesia. This project is not merely a software replacement; it’s a complete overhaul of the tax administration system to make it more modern, integrated, and digital-based.
With Coretax, significant improvements are expected in efficiency, transparency, and taxpayer compliance. While its implementation presents a major challenge, the project’s success will lay a strong foundation for a fairer, more effective, modern Indonesian tax system capable of supporting long-term economic development.