THE INFLUENCE OF MODERNIZATION OF TAX
ADMINISTRATION SYTEM TO TAXPAYER COMPLIANCE
By:
Evie Trie Hardiani
109082100022
DEPARTMENT OF ACCOUNTING INTERNATIONAL CLASS PROGRAM FACULTY OF ECONOMICS AND BUSINESS SYARIF HIDATULLAH STATE ISLAMIC UNIVERSITY
i
CURRICULUM VITAE
Personal Data
Full Name : Evie Trie Hardiani
Nick Name : Evi
Address : Jl. Saketi-Malingping km 7 kp.Sukamaju Rt 12/03 desa Bojong,Pandeglang-Banten
Mobile Phone : 087822288558
E-mail : evi_hardiani@yahoo.com
Place, Date of Birth : Pandeglang, April 28,1991
Gender : Female
Religion : Islam
Nationality : Indonesia
Education
Elementary SDN 4 Bojong 1997-2003
Junior High School SMPN 1 Bojong 2003-2006
Senior High School SMAN 1 Pandeglang 2006-2009
University UIN Syarif Hidayatullah Jakarta 2009-now
Major: Accounting international class program Work Experience
Internship at Koperasi DPR-RI Jakarta (2012)
Organization Experience
Member of OSIS SMPN 1 Bojong
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The Influence of Modernization of Tax Administration System to Taxpayer Compliance
ABSTRACT
Objectives to be achieved in this research, is to analysis the influence of implementation modernization administration system of taxation with of 4 dimensions, which is organizational structure, organizational procedure, organizational strategy and organizational culture toward taxpayer compliance. This research have done by taxpayer in Tax Service Office (KPP) Pratama Senen, Jakarta. The sampling method using is convenience sampling. 100 questionnaires was distributed to the taxpayer with the criteria of respondents in Tax Service Office (KPP) Pratama Senen, Jakarta. Test used was multiple regressions. The results showed that modernization administration system of taxation with of 4 dimensions, which is organizational structure, organizational procedure, organizational strategy and organizational culture significantly influence taxpayer compliance either partially or simultaneously. Based on the result of multiple regressions test was found that the most dominant variable is the variable organizational procedure, it can be seen by the beta value of 0.319.
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Pengaruh Penerapan Modernisasi Sistem Administrasi Perpajakan Terhadap Kepatuhan Wajib Pajak
ABSTRAK
Tujuan yang ingin dicapai dalam penelitian ini, yaitu untuk menganalisis pengaruh penerapan modernisasi system administrasi perpajakan yang dilihat dari empat dimensi yaitu struktur organisasi, prosedur organisasi, strategi organisasi, dan budaya organisasi terhadap kepatuhan wajib pajak. Penelitian ini dilakukan pada wajib pajak yang terdaftar pada KPP Pratama Senen, Jakarta. Metode pengambilan sampel dengan menggunakan tekhnik convenience sampling. Kuesioner telah disebarkan kepada wajib pajak sebanyak 100 kuesioner dengan kriteria responden yang terdaftar di KPP Pratama Senen, Jakarta. Uji yang digunakan adalah regresi berganda. Hasil penelitian menunjukkan bahwa modernisasi system administrasi perpajakan yang dilihat dari empat dimensi yaitu struktur organisasi, prosedur organisasi, strategi organisasi dan budaya organisasi berpengaruh signifikan terhadap kepatuhan wajib pajak baik secara parsial maupun simultan. Berdasarkan hasil uji regresi berganda ditemukan bahwa variable yang paling dominan adalah variable prosedur organisasi, dapat dilihat berdasarkan nilai beta sebesar 0,319.
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FOREWORD
Assalammu'alaikum Wr.Wb
All Praise to Allah SWT as the Hearer, the Seer and above all an abundance of grace, Taufiq, as well as his guidance. So, because Allah SWT I can finish this research on time.
Shalawat always gives to the Prophet of Muhammad SAW and all his family and friends who always helped him in establishing Dinullah in this earth.
With the strength, intelligence, patience, and strong desire from Allah SWT, I am able to finish this mini thesis as graduation pre requirement for bachelor degree. I believe there is an invisible hand which have helped me going through this process.
My special thank for my supermom, Eri Komariah, who had supported with your best way and never gave up to educate me to be a good son. So, I want to make you smile and proud of me, because your smile can make me feel piece and calm in any situations that I have faced. You always pray for the pleasure of your family and me. You always wake up in the middle of the night, just to talk to Allah SWT and hoping that your family will always be blessed by Allah SWT. Therefore, I just want to give the best of me. Thank you for everything mom. I love you so much. You are the best mother in this whole word, I promised to make you happy and proud of being
a son that you want, and I’m thanking to Allah to give me a chance as your little girl.
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are the first men that I want to say thanks in the world when I finish this mini thesis. Thank you for everything my superdad. Thanks for the hard work that had you done for the family. Thanks a lot for being great father ever for me. And I’m very glad to be your little girl. I love you so much dad.
I believe I am nothing without each one of you who has helped me in finishing this mini thesis. So I would like to say thanks to all of them who have been helping me the process of this thesis, including:
1. Prof.Dr.Abdul Hamid, MS as dean of the faculty of Economics and Business 2. M. Arief Mufraeni, Lc.,Msi as Head of International Program.
3. Ahmad Dumyathi Bashori, MA as Secretary of International Program.
4. Prof. Dr. Azzam Jasin as my thesis supervisor 1. You are my mentor who has provided direction and guided me, shared your knowledge to me, and thank you for your time that you gave .So, I able to finish this mini thesis.
5. Wilda Farah,SE,MSi,Ak as my thesis supervisor II who has provided direction, guidance, and thank you for your time and your patience that you gave to me, so I can finish this mini thesis.
6. All Lecturers who have taught patiently, may what they have given are recorded in Allah SWT almighty and all staff UIN Jakarta.
7. All of taxpayer in Tax Service Office (KPP) Pratama Senen, Jakarta for giving me your time to filling my questionnaire. So, I could finish my mini thesis.
8. My brothers, Ricky Tiawarman and Teddy Gunawan and my sisters, Endah Nurhayati and Hayya who always helped and supported me for my best, whatever I do and whenever it is.
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10.Thanks for all seniors and juniors who have prayed and give me spirit. Special thanks to kak Lucki and kak dwi, thanks for your information and help in my thesis process. Thanks a lot.
I realize this mini thesis is still far from perfection, thus suggestions and constructive criticism from all parties are welcome, in order to improve my thesis. Finally, only Allah SWT will return all and I hope this thesis will be useful to all parties, especially for writers and readers in general, may Allah bless us and recorded
as the worship of Allah’s hand. Amin.
Wassalammualaikum Wr.Wb
Jakarta, May 2013
vii
LIST OF CONTENT
Curriculum Vitae ... i
Abstract ... ii
Abstrak ... iii
Foreword ... iv
List of Content ... vii
List of Table ... xi
List of Figure ... xii
List of Appendix ... xiii
CHAPTER I INTRODUCTION A.Background ... 1
B.Problem Definition ... 8
C.Purpose and Benefit ... 8
CHAPTER II LITERATURE REVIEW A.Taxation ... 10
1. Definition of taxation... 10
2. Function of taxation ... 12
3. The principle and basic of tax levy ... 13
4. System of tax levy ... 14
viii
B. Taxpayer ... 18
1. Definition of taxpayer ... 18
2. Subject of taxation ... 18
3. Right and obligation of taxpayer ... 18
C. Modernization System of Taxation Administration ... 20
1. Definition of Administration ... 20
2. Administration of Taxation ... 21
3. Reform of the Taxation Rules ... 22
4. The History of Taxation Administration System ... 25
5. Reform of the Taxation Administration System ... 27
D. Dimension of Application of Modernization of Taxation Administration System... 31
1. Organizational Structure ... 32
2. Organizational Procedure ... 35
3. Organizational Strategy ... 36
4. Organizational Culture ... 37
E. Taxpayer Compliance ... 38
1. Definition of Compliance... 38
2. The Factors That Affect Taxpayer Compliance... 39
3. Criteria of taxpayer compliance ... 40
F. Previous Research ... 41
G. Theoretical Framework ... 44
ix
CHAPTER III RESEARCH METODHOLOGY
A. Scope of Research ... 52
B. Sampling Method ... 52
C. Data Collection Method ... 53
1. Primary Data... 53
2. Secondary Data... 54
D. Data Analysis Method ... 54
1. Descriptive Statistic ... 54
2. Data Quality Test ... 55
a. Validity of Test Data ... 55
b. Reliability Test Data ... 55
3. Classic Assumption Test ... 56
a. Test of Normality ... 56
b. Test of Multikolonieritas ... 56
c. Test of Heteroskedastisitas ... 57
4. Hypothesis Test ... 58
a. Multiple Regression Test ... 58
b. Coefficient Determination Test (Adjusted R2) ... 59
c. Partial Regression Testing (T Test) ... 59
d. Significant Simultaneous Test (Test Statistic F) ... 59
x CHAPTER IV RESULT AND ANALYSIS
A. An Overview of The Research Object ... 69
B. Analysis and Discussion ... 76
1. Test Results of Descriptive Statistic ... 76
2. Result of Data Quality Test ... 77
a. Result of Validity Test ... 77
b. Result of Reliability Test ... 80
3. Result of Classic Assumption ... 82
a. Result of Normality Test ... 82
b. Result of Multicolonierity Test ... 83
c. Result of Heteroscedastic Test ... 84
4. Result of Hypothesis Test ... 85
a. Result of Multiple Regression Test ... 85
b. Result of Coefficient Determination Test (Adjusted R2) ... 86
c. Result of Partial Regression Testing (t-test)... 87
d. Result of Significant Simultaneous Test (F Test) ... 92
C. Interpretation ... 93
CHAPTER V CONCLUSION , IMPLICATION AND RECOMENDATION A. Conclusion ... 98
B. Implication ... 99
C. Recommendation ... 102
REFFERENCE ... 103
xi
LIST OF TABLE
NO INFORMATION PAGE
1.1 The Realization Revenues of The Country ... 2
2.1 The Obligation of Taxpayer ... 20
2.2 Differences between the Old System and the New System ... 31
2.3 Previous Research ... 42
3.1 Scale Likert ... 54
3.2 Research Operational Variables ... 67
4.1 Questionnaires Distribution ... 74
4.2 Characteristic Respondents ... 74
4.3 Descriptive Statistics ... 76
4.4 Result of Validity Test Variable Organizational Structure ... 78
4.5 Result of Validity Test Variable Organizational Procedure ... 78
4.6 Result of Validity Test Variable Organizational Strategy ... 79
4.7 Result of Validity Test Variable Organizational Culture ... 79
4.8 Result of Validity Test Variable Taxpayer Compliance ... 80
4.9 Result of Reliability Test ... 81
4.10 Result of Multicollinearity Test ... 83
4.11 Result of Multiple Regression Test ... 85
4.12 Result of Coefficient Determination Test (Adjusted R2) ... 86
4.13 Result of Partial Regression Testing (t-test) ... 88
xii
LIST OF FIGURE
NO INFORMATION PAGE
2.1 Theoritical Framework ... 46
4.1 Result of Normality Data Test ... 82
xiii
LIST OF APPENDIX
NO INFORMATION PAGE
Appendix 1 Research of Questionnaire ... 106
Appendix 2 The Result of Questionnaire ... 113
Appendix 3 Result of Validity and Reliability Test SPSS 20 ... 127
Appendix 4 Result of Multiple Regressions Test ... 132
1
CHAPTER I
INTRODUCTION
A. Background
National development in a country in fact organized by the people,
together with governments that cooperate with each other to be able to realize
successful national development that creates a fair and prosperous society
based on Pancasila. The role of government becomes very important and has
strategic position because it is impossible to drive the governance program
and national development without the financial support mainly from the
domestic revenues from tax revenue sector.
Indonesia is a country that is actively doing development. This requires
an appropriate strategy in order the achieved equitable economic development
can be enjoyed by all segment of society. In implementing the national
development, the government needs a lot of amount of funds. These funds
can be obtained from inside or outside of the country. Funds from inside may
be obtained from export activities, tax revenues, and non-tax revenues.
Whereas the funds from outside can be obtained from foreign loans and
grants.
Tax is a source of non-oil and gas revenues that is important to finance
government expenditure, either routine expenditure or construction
expenditure. Taxes as the biggest source of income are inseparable part of the
development of Indonesia. One of them is a source of financing for the state
2
budget (APBN). State budget created by the Government itself consists of
three main sources of revenue, namely: 1) tax revenues, 2) oil and gas
revenues, and 3) non-tax revenue. From year to year, we can see that the tax
revenue continue to rise and give a large participation for state income. Tax
revenue is always said to be reliable in financing national development. The
role of tax revenue in the state budget in the activity of national development
is very important and very strategic, a big size of such taxes may need to be
embedded within each person in complying payment of taxes in order, it can
be a pride for having contribution to national development. The contribution
[image:20.595.125.534.464.733.2]of tax revenue to the state can be seen in table 1.1 below:
Table 1.1
The Realization Revenues of the Country (Billion rupiah) 2007-2012
Note : Differences in the single digits behind due to rounding
The Source of the Revenue 20071) 20081) 20091) 20101) 20112) 20123)
Tax Revenue 490,988 658,701 619,922 723,307 878,685 1,019,333
Domestic Tax 470,052 622,359 601,252 694,392 831,745 976,900
Income tax 238,431 327,498 317,615 357,045 431,977 512,835
Value added tax 154,527 209,647 193,067 230,605 298,441 350,343
Land and building tax 23,724 25,354 24,270 28,581 29,058 35,647 Duties on land and building
transfer
5,953 5,573 6,465 8,026 - -
Excise 44,679 51,252 56,719 66,166 68,075 72,443
Other Tax 2,738 3,035 3,116 3,969 4,194 5,632
Taxes On International Trade
20,936 36,342 18,670 28,915 46,940 42,433
Import Duties 16,699 22,764 18,105 20,017 21,501 23,534
Export Duties 4,237 13,578 565 8,898 25,439 18,899
Non-Tax Revenue 215,120 320,604 227,174 268,942 286,568 272,720
Natural Resources 132,893 224,463 138,959 168,825 191,976 172,871 Profit transfer from SOE's 23,223 29,088 26,050 30,097 28,836 25,590 Other non-tax revenue 56,873 63,319 53,796 59,429 50,340 54,398 Revenue Agency Public
Service (BLU)
2,131 3,734 8,369 10,591 15,416 17,861
Amount 706,108 979,305 847,096 992,249 1,165,253 1,292,053
Percentage of tax revenues compared to Total
3
1) Central Government financial reports (LKPP)
2) State budget income and Expenditure– changes (APBN-P) 3) Plan State Budget income and Expenditure (RAPBN)
Source : Central Bureau of Statistics and the Data processed
From table 1.1 above it can be seen that most of the state's revenues
derived from tax revenue, year to year tax revenues are increase.
To strengthen the implementation of taxation in Indonesia, then as the
basis is the Constitution of 1945 article 23 A which states that tax and other
charges which are forced for the purposes of the state are governed by law.
The provisions of legislation regulating taxation currently include:
1. Act No. 28/2007 about the third change of the General Provisions and
Taxation Procedures Law.
2. Act No. 36/2008 about the fourth change of Act No. 7/1983 on Income
Tax Law.
3. Act No. 18 of 2000 about Value Added Tax termed Goods and Services
and Sales Tax on Luxury Goods.
4. Act No. 12 of 2000 about Land and Building Tax.
5. Act No. 1 of 1985 about the Stamp Duty.
6. Act No. 17 of 1997 about Tax Dispute Settlement Agency.
7. Act No. 38 of 2000 about regional taxes and regional retribution.
8. Act No. 19 of 2000 about Tax Billing with force
9. Act No. 20 of 2000 about Duties on land and building transfer (BPHTB)
10.Act No. 20/1997 about Non-Tax Revenues (PNBP).
4
The problem that arises is the dilemma when it is viewed from one
side of the Country that wants the tax withheld as optimal as possible and
achieve target so that the state can do the development. But, on the other
hand, the taxpayer are not entirely fulfill their responsibility thus the state
income is decreasing, these conditions cannot be denied that there are still
people who think that there is no benefit for paying taxes because there is no
direct benefits obtained from the government.
To increasing the compliance of people on tax, in order the state
revenue will also increase, the Directorate General of Taxes (DJP) make
efforts, such as providing a better quality of service and issuing a policy that
can increase taxpayer compliance. It aims to implement good governance and
excellent service to the society. Besides, issuing the new policies, the tax
authorities must also provide a quality service, then by itself, it will develop a
sense of trust in the tax authorities so that it will build in the taxpayer
compliance. Tax authorities should perform their functions to perform
services fairly, the tax authorities must also be friendly, not arrogant, and
need to put the taxpayer himself equally in the context of business partners
and which are no less important is the assurance that paid taxes come to the
State Treasury, so that the society will be encouraged comply the obligations
of the taxation. Tarjo and Sawarjono (2005) in Mega (2008: 5).
One of the policies issued by the Directorate General of Taxes in the
implementation of good governance is the application of the tax
5
modernization of the system administration of taxation have been applied in
Directorate General of Taxes (DJP). According to Chaizi Nasucha, reform of
the tax administration is a refinement or improvement of the performance of
the administration, either by individual, group or institutional in order to be
more efficient, economical, and fast. Bird and Jantscher (1992), as quoted by
Chaizi Nasucha, argued that in order for the reform of the tax administration
can be successful, it needs to: (1) a simplified tax structure for ease,
administration, and compliance, (2) a suitable reform strategy should be
developed, (3) a strong political commitment to the improvement of the
administration of taxation.
According to Gunadi (2010), the tax administration is prosecuted to be
dynamic in an effort to increase the application of an effective taxation
policy. Feasibility criteria of administration demand that the new tax system
can minimize administrative costs and the cost of compliance and make tax
administration as part of its tax policy. The concept of modernization of tax
administration basically is a change in the tax administration system that can
change the mindset and behavior of the apparatus as well as the value of the
organization so that it can make Directorate General of Taxes becomes a
professional institution with a good image in the community. One of the
purposes of the implementation of modern administrative system of taxation
is to improve the performance of the tax authorities and to improve
6
Tax compliance can be defined as a situation where taxpayer comply
with tax obligations and implement all their taxation rights. There are two
kinds of compliance, namely formal compliance and materials compliance.
Formal compliance is a situation where taxpayer comply with tax obligation
formally in accordance with the provisions of tax laws. While the materials
compliance are a situation where Taxpayer substantively meet all provisions
of the material including formal compliance (Lasnofa and Fauzan, 2010).
In research done by Sofyan (2005) about the influence of modern tax
administration system implementation on taxpayer compliance in KPP of
Directore General of Taxes. The result stated that organizational structure can
increase taxpayer compliance significantly. This result had supported
researches conducted by Abdul Rahman (2009) and Sri Rahayu (2009) and
Lasnofa (2010) which stated that organization structure can increase taxpayer
compliance significantly. With the modernization of organizational structure,
it can increase taxpayer compliance on tax duty.
The result of researches of Sofyan (2005), Abdul Rahman (2009), and
Rapina (2011) stated that organization procedure can increase taxpayer
compliance significantly. With the modernization, organizational procedure,
such as simplification of administration procedure, improvement of timing
standard, quality of services, and tax checking, there is one door services
thorough account representative, and with the support from modern
7
claiming, and modernization of other organizational procedure that can
increase the taxpayer compliance on doing tax duty.
The result of researches of Sofyan (2005), Abdul Rahman (2009), and
Rapina (2011) on the research stated that organizational strategy significantly
influence on taxpayer compliance. With good and proper organizational
strategy, it can increase the awareness of taxpayer on fulfilling their tax duty.
It can be done by doing the campaign of tax care and awareness,
simplification of tax administration, intensification of tax revenue, etc.
(Abdul Rahman: 224)
The result of Rapina’s (2011) research found that no influence of
organization culture on taxpayer compliance. However, the result of research
conducted by Sofyan (2005) proved that organizational culture significantly
influence on taxpayer duty. In line with that research, Abdul Rahman (2009)
and Lasnofa (2010) roved that organization culture significantly influence on
taxpayer compliance
Based on explanation above, then this research intended to prove
whether the application of the policy system of modern taxation
administration which includes four dimensions of the reform of the
administration that are organizational structure, organizational procedures,
organizational strategy and organizational culture influence on taxpayer
compliance or not. So the research title is, “The Influence of Modernization
8
B. Problem Definition
The issues that will be discussed in this research are as follows:
1. Is the organizational structure significantly influence to taxpayer
compliance?
2. Is the organizational procedures significantly influence to taxpayer
compliance?
3. Is the organizational strategy significantly influence to taxpayer
compliance?
4. Is the organizational culture significant influence to taxpayer compliance?
C. Purposes and Benefits
1. Purposes
In accordance with the problem definition, this research aims to find out:
a. To observe the influence of organizational structure to taxpayer
compliance.
b. To observe of the influence of organizational procedures to taxpayer
compliance.
c. To observe of the influence of the Organization's strategy to taxpayer
compliance.
d. To observe the influence of organizational culture to taxpayer
9
2. Benefits
a. The Author
This research is expected to be the form of implementation of
knowledge acquired in university which consists of theories and the
fact in real, so the obtained theory can be used to add knowledge for
the researcher relates to the influence of the implementation of the
system of modern taxation administration on taxpayer compliance on
tax services office pratama Senen, Jakarta.
b. Academic
To contribute additional information as additional scientific reference
regarding the influence of modernization administration system of
taxation to taxpayer compliance in the tax services office pratama
Senen, Jakarta and may be additional material for next researchers.
c. The Society
To give information that the construction of the new policy is very
important to improve taxpayer compliance that result in increased of
State tax revenue, and as the image of the influence of modernization
administration system of taxation to taxpayer compliance in the tax
services office pratama Senen, Jakarta.
d. Directorate General of Taxes
As input for improvement of system with new better policies and
10
CHAPTER II
LITERATURE REVIEW
A. Taxation
1. Definition of Taxation
According to the law No. 28 of 2007, "tax is the contribution of
personal taxpayer or corporation which is forced under the law and not get
rewarded directly used for State purposes for people's prosperity".
Other than KUP definition, many experts give the limitation or an
opinion regarding the meaning of taxation, but essentially has the same
goal and purpose. Below, there are several definition of taxation according
to some experts:
a. The definition of taxes raised by S.I. Djajadiningrat in Rapina, Jerry
and Yenni (2011: 5)
"Tax as an obligation handed over some of his wealth to the State Treasury which is caused by condition, occurrence, and deed that gives certain position, but not as a punishment, according to the regulations set out by the Government and can be enforced, but there is no reciprocal service from the country directly, to preserve the public welfare."
b. Definition of taxes raised by n. j. Feldman in Rapina, Jerry and Yenni
(2011: 5)
"Tax is imposed unilateral merit by and payable to the ruler (according to the norms established in General), without any contra-achievement, and used only to cover the expenses of public-expenditure."
c. Definition of taxes raised by Rochmat Soemitro in Siti Resmi (2009:
1)
11
"Tax is a people's contribution/dues to the State Treasury under the legislation which can be enforced with no reciprocal services (contra-achievement) that can be shown directly, and used to pay for public expenditure."
d. Definition of the taxes raised by Mardiasmo in his book (2009:1)
"Tax is a people's dues to the State Treasury under law (which may be forced) and do not get the reciprocal services (contra-achievement) that can be shown directly and used to pay for public expenditure."
From some definition of taxes raised by the experts, it can be
concluded that the definition of tax are:
a. Can be withheld under tax laws as well as implementation, based on
rules, can be forced.
This is in line with the third amendment of 1945’s Constitution article
23A which stated "taxes and other charges that are forcing for the State’s purposes is set in the constitution". So it guarantees the legal
certainty, both for tax officer as tax collectors or taxpayer. The tax can
be forced if taxpayer do not comply tax duty and can be penalized
according to the regulations.
b. Taxes are withheld by the central government and local government.
Tax is one of the sources of revenue of the State, so if the tax levy is
separated between the central government and the local government,
then local government will get an equal chance to advance and expand
its region.
c. Taxes are used for government expenditures, when there is a surplus
can be used to finance Public Investment.
12
d. In the payment of taxes, it could not be shown any individual
contra-achievement by the Government.
For example, people who keep paying taxes of vehicles will go
through the same quality path as people who do not pay tax on
vehicles.
2. Function of Taxation
Expressed by Ilyas (2007: 10-11) in Rapina, Jerry and Yenni
(2011:5) there were four tax functions, namely:
a. Budgeting Function is a function that is located in the public sector,
namely a function for collecting tax money as much as possible in
accordance with the laws in effect at the time will be used to finance the
expenses of the State, and when there is a surplus, it will be used as
government saving for government investment.
b. Regulatory Function which is a function that the taxes will be used as a
tool to achieve certain objectives that is outside of financial aspect.
c. Democracy Function is a function which is one of embodiment or
manifestation of the gotong-royong system, including the activities of
the government and the construction for the benefit of mankind. This
function is often associated with a person's right to obtain the services
from government when he has performed its duty to pay taxes, if the
government does not give good service, taxpayer can complain it.
d. Distribution Function is a function that a greater emphasis on elements
13
Some understanding of the tax function expressed above it can be
concluded that the definition of tax functions are:
a. As a source of state revenue, taxation is to finance the state expenditure.
Taxes are used for routine expenditure such as personnel expenditures,
material expenditure, maintenance, etc.
b. With the regulatory function, taxes can be used as a tool to achieve a
goal. For example, in order to attract capital investment, either domestic
or abroad, it is given the wide range of on-site tax relief. In order to
protect domestic production, the government set high import duties for
foreign products.
c. Taxes that have been withheld by the state will be used to finance all of
the public interest, as well as to finance the construction so that it can
create jobs, which in turn, will be able to increase the people's income.
3. The Principle and Basic of Tax Levy
To achieve the purpose of the tax levy in the alternative levy, based
on the principles of tax levy, so that there is harmony between the tax
collector with the purpose and basis.
Adam Smith in his book, “ An Inquiry Into The Nature And Causes
Of The Wealth Of nation ", quoted by Santoso Brotodiharjo in his book
"Pengantar Ilmu Hukum Pajak (2003: 27), there are four basic principles of
the tax levy, namely:
a. Equality
14
b. Certain
The principle of legal certainty.
c. Convenience of Payment
The basis of the on time tax levy or the principle of pleasure.
d. Efficiency
The tax should be done economically, do not collect taxes over income
taxes.
A basic understanding of some of the tax basis expressed above it can
be concluded that the fundamental basis of the poll tax is:
a) Tax Collection performed by the State should be in accordance with
ability and income of taxpayer. The State should not act indiscriminately
against taxpayer.
b) All tax levies should be based on the tax legislation, so, for those who
violate the law will be subject to sanctions.
c) The tax must be withheld at the right time for taxpayer, for example at a
time when the taxpayer receives salary or when the taxpayer receives a
bonus.
d) Costs of tax levy must be done efficiently, do not get tax levy costs
going higher than the results of the tax levy.
4. System of Tax Levy
System of tax levy can be distinguished into three parts (quoted in
15
a. Official Assessment System
The levy system which gives is the authority for the tax apparatus
to determine personally the tax amount owed each year in accordance
with the regulations.
In this system, initiatives and activities to calculate and collect
taxes entirely in the hands of the tax apparatus. Thus, successful or
unsuccessful of the tax levy depends on tax apparatus.
b. Self-Assessment System
The tax levy system is the system that gives authority to the taxpayer
in determining the amount of tax owed on its own each year in
accordance with the regulations. In this system, initiatives and activities
to calculate and collect taxes entirely in the hands of taxpayer. The
taxpayer is deemed to be able to calculate the taxes, is able to understand
the current tax law, and has a high honesty and to realize the importance
of paying taxes. Therefore, the Taxpayer is given the trust to:
1) Calculate the own tax payable
2) Capable to calculate the tax payable
3) Pay for itself the amount of tax owed
4) Reported by themselves amount of tax owed, and
5) Accountable for tax owed.
Thus, successful or unsuccessful of implementation of the tax levy
16
c. Withholding System
`The system of tax levy that give the authority to the elected third
party to determine the amount of tax owed by the taxpayer in accordance
with the regulations. The appointment of third parties is carried out
according to regulations, the decree of the President, and other
regulations to cut and collect taxes, deposit, and accountable through
available facility of taxation.
In this system, the successful implementation of the poll tax
depends on the elected third party.
5. Terms of the Tax Levy
In order the tax levy will not cause obstacles or problem, then the tax
levy must meet the following requirements (Mardiasmo, 2006: 2-3) in
Rapina, Jerry and Yenni (2011: 6):
a. Tax levy should be Fair (Principle of Fairness). According to the
purpose of the law, is achieving justice, legislation and implementation
of the tax levy should be fair.
b. Tax levy should be based on Legislation in Indonesia (Principle of
Jurisdiction)
c. Tax levy should not disturb the economy (Principle of Economic)
d. Tax levy must be efficient (Principle of Finance)
e. Tax levy system should be simple
From the requirements above, it can be concluded that the
17
1) Fair, according to law, means levying tax must be imposed
generally and equally, and adjusted to the capability of taxpayer.
While fair according to the execution means giving the right of
taxpayer to file objection, postponement of payment and to file
appeal to The Consultative Board for Taxes. For example, by
setting their right and the obligation of taxpayer.
2) According to article 23 of 1945 Constitution stating: “tax and
charge for the purpose of the state is set in legislation”, so that the
taxpayer can have legal guarantees to be not behaved in general.
3) Tax levy must be done properly in order it will not disturb the
economic condition, either production activity, trading, or services.
Tax levy must not harm the public interest and hamper the activity
of taxpayer, especially low and middle class.
4) Cost expensed for tax levy, must be recorded. It may not the tax
received is lower than the cost of tax levy. Therefore, tax levy
system should be simple and easy to apply. So that, taxpayer will
not mind, either in calculation the tax or time.
5) How the tax levied is will determine the success of tax levy.
Simple system will ease taxpayer to calculate tax payable, so that it
will give positive impact to taxpayer to increase the awareness of
tax compliance. In the opposite, if the system of tax levy is
18
B. Taxpayer
1. Definition of Taxpayer
In Act No. 28 of 2007, the definition of taxpayer is changed into:
"The taxpayer is a person or entity, including personal tax payers, tax
cutter and tax collector, who has the right and obligation of taxation in
accordance with the provisions of the regulations."
While based on the income tax, the Taxpayer is the person or entity
that meets the definition as the subject of the tax and receive or earn
revenue which is the object of taxation. In other words, those two elements
must be met to become tax payers and tax objects.
2. Subject of Taxpayer
The subject of taxpayer consist of three types, namely personal, the
legacy has not been Split, and Permanent Establishment. The subject of
Taxation is also distinguished into domestic and international tax. The
domestic subject of taxation become taxpayer if they has earned revenue
while international subject of taxation become a taxpayer if they earn
revenue from Indonesia or obtained through a fixed business form in
Indonesia. So the taxpayer is a private person or entity that has met the
subjective and objective obligations.
3. Right and Obligation of Taxpayer
a. Rights of Taxpayer
The rights of taxpayer by law No. 28 of 2007 are as follows:
19
2) Submit statement of objections and appeals to taxpayer with
certain criteria.
3) Extend the term of submission of Annual Income Tax Notice for
due date of two months by delivering a notice in writing or by
other ways to the Director General of taxes (DJP).
4) Corrects the notice that has been delivered by passing a written
statement, in the condition the Director General of Taxes (DJP) has
not been doing the examination.
5) Apply for a refund of overpaid taxes
6) File an objection to the Directorate General of tax on a Tax
Underpayment Assessment Letter, Additional Tax Underpayment
Assessment Letter, Nil Tax Assessment Overpayment Assessment
Letter, and cutting or tax collection by third parties based on the
provisions of the legislation.
7) Apply for an appeal to the tax court on the decision letter of
objection.
8) Appoint a person with special power of attorney to execute the
rights and meet the obligations in accordance with the provisions
of the regulations.
9) Obtain a reduction in or elimination of administrative sanction in
the form of interest on the late payment of taxes cashdeficiency in
terms of taxpayer conveyed the correction of the notice of the
20
should be paid become bigger and carried out within a period of
one year after the enactment of law No. 28 of 2007.
b. Obligation of Taxpayer
The obligation of taxation as a state obligation, should be put in
terms of the interests of the state. Interest of the state is closely related
to the purpose and function of the obligation to pay taxes and other
[image:38.595.142.521.341.563.2]provisions supporting the tax payment order.
Table 2.1
The Obligation of Taxpayer
No Analysis Explanation
1 Taxpayer Register to obtain a Taxpayer Identification Number (NPWP).
2 Taxpayer Calculate, deposit and report tax payable, including obligation of collectors and tax cutter 3 Annual
Notification
Fill out an notification letter(SPT) clearly, completely and signed.
4 Bookkeeping Organize the bookkeeping or records
Saving accounts for 5 years
5 Debt Payer Bore range due to the payment of VAT or tax debt, meaning we responsible to pay debt payable even though it behalf of our company
6 etc.
Source: Mardiasmo (2009:54)
C. Modernization System of Taxation Administration
1. Definition of Administration
According to the Dictionary of Indonesian (2005): "The
Administration is 1) efforts and activities include goal setting as well as
the determination of ways of organizing the construction of the
21
to achieve the objectives; 3) activities related to organizing the
government; 4) office and administrative activities."
According to Trecker’s opinion (Rapina: 2011), administration is a
process which is dynamic and sustainable, which is driven in order to
achieve the goal by utilizing people and material through coordination and
cooperation.
According to Liang Gie, administration means as a chain of
activity done by a group of people in a cooperation to achieve an
objective.
Another meaning of administration is all of activities having same
substance, which is the existence of certain activity and people doing
cooperation to achieve previous decided objectives.
From several meaning above, it can be concluded that the meaning
of administration is all of chain of activities done by two or more people to
achieve an objective by using certain facility and being able to achieve
decided targets.
2. Administration of Taxation
According to Sophar Lumbantoruan (1997: 582) in Sri Rahayu and
Ita (2009: 121), administration of taxation is all ways or procedures of the
imposition and collection of taxes about role of taxation administration.
While according to Pandiangan (2008) in Sri Rahayu and Ita
(2009: 121), stated that the administration of taxation is attempted to
22
According to Gunadi (2009),"Administration of taxation is ordered
to be dynamic in an effort to increase the effective implementation of
taxation policy. Feasibility criteria of administration demands the new tax
system to minimize administrative costs and compliance as well as make
administration of taxation as part of the tax policy.” The two main tasks of
reformation of taxation according to the Chaizi Nasucha is to achieve high
effectiveness, that the ability to achieve a high level of compliance and
efficiency with the ability to make the lowest administrative cost per unit
tax receipt. The effectiveness and efficiency sometimes create a
contradiction so that it is necessary the coordination, special measurement
to increase the effectiveness and efficiency of taxation administration. In
improving the effectiveness, it is used measurement: (1) voluntary tax
compliance, (2) the principles of self-assessment, (3) provide information
to the taxpayer, (4) speed in finding the problems associated with the
notification letter(SPT) and payment, (5) improvement in supervision and
control, (6) the appropriate sanctions. In improving the efficiency of tax
administration, in particular, can be stimulated by: (1) provision of special
units for large companies; (2) an increase in taxation for small taxpayer,
(3) the use of banking services for tax levy, etc.
3. Reform of the Taxation Rules
One of the first reform of taxation part one is the reform in the field
of taxation law. The result is the validation of Law No. 28 of 2007 about
23
2008 about taxable income (PPh) by the House of Representatives and the
President which brought change in taxation in Indonesia. The main points
of change in the tax law is still sticking on taxation principles universally
embraced, namely justice, convenience/efficiency of the administration, as
well as increase and optimization of the state revenue while maintaining
self-assessment system. This amendment is one of the major steps
undertaken to support the tax reform that is going on, so the Directorate
General of Taxes, so it is expected, in the medium term or long term, can
increase State revenue with the increase of voluntary compliance. There
are 18 main points of change about General Provisions and Taxation
Procedures Law, such as:
1) Provision regarding the taking, filling, signing and filing the
notification letter (SPT) can be done by electronic media.
2) The deadline for the submission of notification letter (SPT) of income
revenue tax which was previously at least for three months is turned
into at least four months after the end of the tax year.
3) Administrative sanctions fines for taxpayer with their own accord
revealed their injustice act after the examination but haven't done a
follow up investigation, handed down from 200% to 150%.
4) Overdue determination of tax and overdue levy is shortened from ten
years to five years since the end of the tax period, or a tax year.
5) In order to encourage the taxpayer to reveal the unreported income in
24
given the opportunity to file the correction by being given the
reduction or elimination of sanctions of administration, as long as the
correction is performed on the first year of the enactment of this Law.
6) Due date till one year after the enactment of this Law, personal
taxpayer voluntarily register to obtain a tax identification number are
given the removal of sanctions on tax administration, unless there are
data or information state that notification letter (SPT) of taxpayer is
incorrect or overpaid.
One form of tax reform in Indonesia is by being legalized of Law
No. 36 of 2008 which was the fourth amendment of Law No. 7 of 1983
about income tax through a long process and involves a stake holder
including entrepreneurs that reflects justice and equality of position
between tax officer and Taxpayer. Decline in tariff, the emphasis of the
cost of compliance, law enforcement more firmly to the wayward
taxpayer, equality between tax officer and taxpayer are points in the tax
reform law of income tax. Law No. 36 of 2008 was enacted in September
23, 2008 and publicly implemented in January 1, 2009.
Besides that, the change in tax reform 2008 which is involved in
law No. 36 of 2008 about Fourth Amendment Law No. 7 of 1983 about
income tax which is by imposing different tariff on individual taxpayer
and corporate taxpayer. Expectedly with the new tax rate, then the
corporate taxpayer will be benefited thereby revenues from taxpayer can
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4. The History of Taxation Administration System
Since 1983, the Directorate General of Taxes has initiated to do
reforms in the field of the administration of taxation to increase confidence
of taxpayer by giving qualified services. It is characterized by a reform in
the field of legislation by applying the self-assessment system and changes
to the organizational structure that prioritizes service aspects to taxpayer,
started with the changes of tax inspection Office to tax services office. To
provide service and better supervision, Directorate General of Taxes needs
adequate information technologies support. In line with the development
of information technology and organization of Directorate General Taxes,
information system of taxation, which is used since 1994, already
inadequate to serve and supervise the taxpayer as a whole. Therefore, in
the establishment of regional offices and tax service office for big taxpayer
in 2002, the Taxation Information System is developed into an integrated
tax administration system which has base on organization structure based
on functions. In addition, there are still weaknesses in the reporting system
of taxpayer that is manual reporting requires tax officer to perform
repeated recording which is error-prone and requires no small amount of
resources. Through the development of information technology,
Directorate General of Taxes to develop several programs aimed to
improve services to taxpayer in the form of e-SPT and e-Filing. In the
system of taxation payment is also found some problems, such as
26
General of Taxes develops electronic payment system that is known as
monitoring of tax payments report. Reform in the field of taxation
administration is continuing and in 2001, Directorate General of Taxes
propose reform program that can increase the trust of taxpayer to taxation
system which is finally aimed to increase taxpayer compliance.
Modernizing itself covers 3 things, namely the reform of policy,
administration and supervision:
a. Policy reform through amendments of the taxation law that is Law No.
28 of 2007 about the General Provisions and Taxation Procedures
Law, Law No. 36 year 2008 about income tax, Value Added Tax Law
and Indirect Taxes.
b. Administration Reform relates to organization, information technology
and human resources. In the field of organization, it has made changes
to the organizational structure based on each kind of services to be
organization with structure based on functions by combining three
offices (KPP, KPPBB and Karikpa) become the KPP Pratama. Besides
KPP Pratama, there are KPP Madya in every regional office and 2 big
Taxpayer KPP exists only in Jakarta. In addition there are special
officials called account representative which oversees and serve
taxpayer.
c. Information technology reforms. The concept is full automation, ons a
paperless internal administration, efficiency, customer oriented and
27
taxpayer so that it ease the taxpayer to fullfill their tax obligation
economically, efficiently, effectively, and accurately by the existence
of built-in control system. The reform of the supervision is done
through:
1) Code of Conduct Commission. The code of conduct expressly
includes the obligation and the prohibition for employees,
including the application of strict sanctions. In addition, it is
formed two Sub Directorate that handle internal oversight to the
implementation of the code of ethics.
2) National Data Bank. The plan serves as the center of archives
containing data storage of taxpayer all over Indonesia.
3) Complain channel as a way to ease taxpayer in conveying
problems and complaint.
5. Reform of the Taxation Administration System
Tax reform is a fundamental change in all aspects of taxation. Tax
reform which become the priority regarding to the modernization of the
tax administration of the medium-term (three to six years) with the
purpose of achievement for, the high level of voluntary compliance,
confidence in the tax administration, and high productivity of tax officer,
Anggito Abimayu (2003) in Rapina, Jerry and Yenni (2011: 8).
The other purposes of the reform of the administration is to
improve administration and anticipate improvements to achieve better
28
The definition of administrative reform is extensive due to the wide range
of activities involved in it.
Since 2002, Directorate General of Taxes (DJP) has launched the
change program or the reform of the administration of taxation which is
briefly referred to the modernization. The soul of the program is the
implementation of good governance, namely the application of the tax
administration system that is transparent and accountable, by using the
technology information system which is reliable and up-to-date.
According to Liberti Pandiangan (2008: 64) modernization of
carried out taxation is part of a grand design of comprehensive tax reform.
As being targeted since 2002, that tax reform in a comprehensive manner
is made into three main areas which is directly touch the pillar of taxation,
namely:
1) Administration field, which is through the modernization of tax
administration
Through the modernization of the taxation administration, it is
expected to create the pillars of good and strong national taxation
management as a good and sustainable fundamental of state revenue.
In this case, the management of taxation is basically not avoid to the
views, opinions, or critics from various external parties. The
Directorate General of Taxes try to be transparent and make it as input
in setting up and building a good and modern taxation management
29
2) Regulation field, by making amendments to the Taxation Law
From taxation law aspects, it keeps try to create and develop
juridical formality and material of taxation. It can be done by making
adjustment and regulation regarding to the current developments in life
of society, state, or economic activity. The reason is a rule, basically,
should be able to follow and being followed by the life of society,
state, and stakeholders. If not, then the regulation could be a barrier
even contradictory, so that the achievement of the targets can be
incompatible with what is expected.
3) Supervision field, creating bank of data of the national taxation
In the field of supervision, it is built a national data bank of
taxation as an effort to revitalize the implementation of self-assessment
system with the official assessment in the calculation and
determination of the magnitude of the tax payable, as provided for in
the taxation law. In addition, the construction of data bank of national
taxation is also aimed to undertake extensification and intensification
activities of taxation. Through the activities of extensification, based
on data and information that it is ordered for people who has been
qualified to register as a Taxpayer to obtain a Tax Identification
Number. For personal subject, the limit is for those who have obtained
the above nontaxable income either already married or not married.
After the society know this appeal, and apparently people have not
30
system, to make it balance, so it publish officially Tax Identification
Number (official assessment). Through extensification, the expansion
of the tax base in which there is the increase the number of taxpayer,
especially personal taxpayer. Under such conditions, it does
intensification activities to realize aspect of justice. Along with that,
the intensification of activities carried out various efforts of activity.
One of those through the optimization of the taxation data utilization
model (OPDP).
According to the Summer, Linn and Archarya quoted by
Marcus (2005: 15), the reason to commit tax reform are:
1) As part of the structural adjustment, tax reform is used to reduce
the distortion of economic stimulation and the occurrence of the
deficiency and inequity in the allocation of resources.
2) As part of efforts to stabilize the economy, tax reform, together
with state expenditure cutting, at the same time to generate revenue
in a rational without distortion, fair and sustainable.
According to the Bird and Jantscher quoted by Marcus Gale
(2005: 15), tax policy changes without being supported by the tax
changes is not meaningful. Changes in the field of taxation must be
in line with its administrative capacity, because the administration
of taxation is a policy in the field of taxation which has inseparable
31
Table 2.2
Differences between the Old system and the New System
OLD SYSTEM NEW SYSTEM
Tax office organization structure is formed by type of tax, there is no clear separation of functions because it is implemented in one section according to type of tax
Organization of modern tax service office is formed by a function which leads to improved services to the public / taxpayer of all types of taxes.
Monitoring and services function have not been effective due to lack of specialized staff to perform these functions.
The existence of supporting specialized staff or selected AR service, and work professionally as services and supervision to the taxpayer.
Inspection management because it is in two units of the tax inspection so that coordination is not good.
Inspection management is more efficient and effective because it is in one unit of the human resources unit specialized in certain sectors so that coordination function is better. Taxpayer do their taxation
obligation in the form of payment and manual reporting by using the hard copy so that it is less practical
Utilization in development and advances information technology. The facilities include: website, call center, complaint center, filing, e-SPT, online payment.
Process of Execution of the work for the service of process, supervision, and inspection of the less efficient and far too bureaucratic, so that the relative high cost of compliance.
The process of implementation of the work less efficient and reduce bureaucracy so that cost of compliance is relatively low. With existence of AR, the handling of various aspects of taxation will be monitored more quickly.
Source: Iklima Pila Sopia (2008)
D. Dimension of Application of Modernization of Taxation Administration
System
The application of modern taxation administration system through
32
administration is explained in the dimensions of Modern Taxation
Administration System as follow:
1. The Organizational Structure
Organizational structure is the element that relates to the role of the
patterns that have been determined and the relationships between roles,
allocation of activities to subunits-separate, the distribution of authority
between administrative positions, and formal communication network.
(Abdul Rahman:2010:213).
a. Establishment of the Organization by Function
As a manifestation of revamping in the function of services,
supervision and inspection, organizational structure which is based on
the decision of the Minister of Finance No. 443/KMK. 01/2001 is
drawn up according to the type of tax, where income tax and others
(VAT or other indirect taxes) served in tax office, while the Land and
building Tax and the Fees for Acquisition of Rights to Lands and
Buildings (BPHTB) served by a of Land and Building Tax Services
Office.
By implementing the modern taxation administration system,
organizational structure is designed with paradigm based on clear
separation of functions between regional offices and tax offices, where
tax offices are responsible to carry out the functions of the services,
33
responsible to carry out the function of supervision of tax offices
operational activities, objection and appeal, and investigation.
b. Specification of Duty and Responsibility
In the organizational structure, there is specification of duty and
responsibility, such as:
1) Account Representative. The appointment of an Accounts
Representative is special to serve and oversee fulfillment of
taxation obligations of taxpayer directly. With the distribution of
tasks adjusted to the business group of taxpayer, Account
Representative is responsible for providing answers to any
questions asked by taxpayer effectively and professionally,
especially on taxpayer's Account for all types of taxes, the
progress of the inspection process and restitution, interpretation
and the affirmation of a rule, the changes of data of the taxpayer’
identity, the action of tax billing and examination, progress of
process on objection and appeals, changes of regulation relating to
the taxation obligation of the taxpayer.
2) Examination of tax is only conducted by functional examiner with
the allocation of functional examiner is adjusted to the level of
examination risk and conducted technical training which supports
professionalism of examiner according to the of the business
34
3) Specialty of other employees such as tax executor and information
technology programmer.
c. Completing and Perfecting the Taxation Information System
Implementation into an Integrated Taxation Administration System
Taxation Information system (SIP) is developed into an
Integrated Taxation Administration System (SAPT) controlled by the
case management in the process of monitoring systems of taxation
administration refers to the automation of the office include services,
sequencing supervision, supervision of executor and reporting
designed in accordance with the current legislation .
d. Routine monitoring through a Taxpayer's account
Transparency of services and fulfillment of taxation obligations
of Taxpayer are supported with the Taxpayer's Account that serves to
record automatically any changes that occur to the rights and
obligations, objections, balance transfer, notification letter, and other
tax documents so that it eases to oversight of taxation rights and
obligations for each of the taxpayer.
e. The Mechanism of supervision of services and examination
Setting standard performance and taxation services,
implementing a code of ethics for Civil Servants of tax officer and the
establishment of Code of Ethic Committee as well as cooperation with
National Ombudsmen Committee will complete the set of surveillance
35
2. The Organizational Procedures
Organization procedures relates to process of communications,
decision making, achievement selection, socialization and career.
Discussion and an understanding of organizational procedures are based
on the activity of the organization that is conducted regularly. (Abdul
Rahman:2010:213).
a. One Door Services of Account Representative
The appointment of the Account Representative which is
responsible specifically to serve and supervise the taxation
administration of some Taxpayer by developing the concept of one
door services so that it can reduce the critical interface between
Taxpayer with a tax officer who likely can lead to negative excesses.
Account Representative also handles exemption certificate, tax deposit
balance transfer, ruling and publishing legal product.
b. Simplification of administrative procedures and improvement of the
standards of time and quality of service and tax inspection
Activities performed include: (i) simplifying the notification
letter(SPT), (ii) accelerate the process of resolving the objections and
appeals of tax products, (iii) reinforcement of the Taxpayer, (iv)
review the criteria of levied taxpayer to reduce he request for
restitution, (v) reviewing the obligation of inspection upon each
36
of the Annual Tax Overpayment Letter (SPT LB) that is at low risk,
(vi) the centralization of value added tax (VAT).
c. Support of modern information technology in providing services,
supervision, inspection and collection of taxes, among other things:
Integrated Taxation System Administration (SAPT) with
integrated functions of administrative procedures and approaches that
have been arranged in case management and workflow system
supported system, especially payment, SPT, Registration,
e-Filing, e-Counseling, complaint center that helps speed, accuracy and
security of process data security administration taxation of mandatory
tax obligation fulfillment.
3. The Organizational Strategy
The organizational strategy is seen as a tactic, point of view, and
response that aim to take advantage in all conditions, factors,
opportunities, and resources, so that objectives of the organization can be
achieved successfully and happily. Strategy is developing from time to
time as the meaningful flow pattern of decision. (Abdul
Rahman:2010:213).
a. Conscious and Care Tax Campaign
Campaigns and socialization of taxation as part of good
governance framework through various parties, such as universities,
37
the installation of billboards in strategic location and improve the
performance of extension as information services and public relation.
b. Simplification of Administration of Taxation
Information technology support accelerating the process of
services and investigation in which the database is developed in the
online network will probably allow the acceleration of information
access and also reporting services of Notification letter (SPT) and
payment of taxes can reduce online administrative cost and compliance
cost.
4. The Organizational Culture
Organizational culture is defined as a syst
