Director General of Taxes
Remarks by 35
Director General of Taxes
2022 AnnualReport
DGT achieved outstanding results by implementing the aforementioned main policies and initiatives. DGT set a record in 2022 by successfully achieving the tax revenue target for two consecutive years. The cumulative performance of the Regional Tax Offices and tax offices, which all exceeded expectations, propelled national tax revenues in 2022 to Rp1,716.76 trillion, or 115.61 percent of the State Budget target, increased 34.26 percent from 2021. Such tax revenue collection performance drove the tax ratio back into the double digits in 2022, at 10.39 percent.
In 2022, almost all types of taxes have managed to grow positively. The VAT and Sales Tax on Luxury Goods group grew 33.28 percent with the largest revenue contribution coming from Domestic VAT with a value of Rp610.86 trillion, followed by VAT on Import with a value of Rp270.23 trillion and Domestic Sales Tax on Luxury Goods with a value of Rp14.49 trillion. The Non-Oil and Gas Income Tax group posted growth of up to 37.95 percent. The three biggest streams of Non-Oil and Gas Income Tax revenue performance are Article 25/29 Corporate Income Tax with a value of Rp385.42 trillion, Article 21 Income Tax with a value of Rp172.66 trillion, and Final Income Tax with a value of Rp166.82 trillion.
The overall performance of DGT in 2022, as calculated from the achievement of state tax revenues and other strategic To address the challenges in achieving the tax revenue
target and increasing the tax ratio in 2022, DGT has established priority policies and implemented several strategic steps. The key policies set by DGT in 2022 focus on optimizing the implementation of HPP Law through the development of derivative regulations. Such optimization is supported by the implementation of a taxpayer compliance monitoring pattern that emphasizes office preparation and implementation of a Supervisory Priority List. Other key policies, namely encouraging all offices to increase post- audit activities for pre-audit refund of tax overpayments, increasing supervision and audit of the compliance of taxpayers with tax duties, as well as optimizing the role of Tax Appraisers in monitoring, auditing, collection and law enforcement activities.
The strategies for securing tax revenues implemented by DGT in 2022 include: a) maximizing the expansion of the tax base, one of which is through subsequent follow-up to the Voluntary Disclosure Program; b) strengthening the extensification of taxation and regional-based supervision by grouping lists of targets and priorities for supervision, audit, collection and appraisal, as well as focusing more on the criteria for high-income individual taxpayers along with groups and the digital economy; c) acceleration of human resources, organizational, business process, and regulatory reforms in preparation of the implementation of a new tax system integrated with various stakeholders; and d) implementation of targeted and measurable fiscal incentives to encourage the growth of certain business sectors and provide convenience of investment.
36 Remarks by
Director General of Taxes 20
Annual 22
Report
Tax reform is still ongoing. The Core Tax Administration System (CTAS) Project is one of the agendas for tax reform in the pillars of business processes as well as information technology and databases. In the Core Tax Administration System Project, DGT redesigns the tax administration business process while building an information system and improving the tax database. MANTAP, an acronym that reflects the mission and objectives, namely Easy, Reliable, Integrated, Accurate, and Definite. This contains the philosophy that the Core Tax Administration System Project is expected to provide tax officials and taxpayers with convenience in using the tax system, reliability in the information system, integration of all business processes at DGT into one complete system, accuracy and validity of data, and legal certainty to all users.
From the taxpayer side, the Core Tax Administration System Project assists them by providing quality services, reducing the possibility of disputes, lowering compliance costs, and providing complete digital services with maintained service standards. With integrated application support, the Core Tax Administration System Project is projected to make staff activities easier by decreasing manual effort and therefore enhancing productivity. The implementation of the Core Tax Administration System Project will increase overall tax revenue performance by increasing accountability, credibility, and public trust.
In 2021, DGT along with stakeholders had completed the preparation of a high-level design and detailed design of the core tax business process. Subsequently, the development of the core tax system module has been completed in 2022.
The activities in 2023 focus on the completion of training, testing, as well as outreach and education to DGT’s offices and employees. DGT’s resources will be meticulously prepared for the implementation of the core tax administration system in 2024.
SPIRIT OF REFORM TO IMPROVE SERVICES AND PRODUCTIVITY
In every opportunity to participate in international forums, DGT carries a mission that is designed to serve national interests and develop strong bilateral and multilateral ties between Indonesia and partner countries. DGT’s strong participation in many global communities reflects Indonesia’s commitment to the global agenda in efforts to achieve fair and transparent international taxes.
It is an honor to be entrusted with the task of being the organizer of the 2nd Asia Initiative Meeting on August 31
the Finance Track and represents a follow-up to the first meeting which took place on February 16, 2022, in Jakarta as well as the ministerial meeting and signing of the Bali Declaration on July 14, 2022. DGT appreciates the spirit of collaborative effort shown by the heads of partner countries’ tax authorities and international organization delegates at the second meeting of the Asia Initiative.
DGT regards the Asia Initiative forum as a vital platform for sharing experiences and building stronger relationships among member countries in a commitment to drive the tax TAKING A SIGNIFICANT ROLE IN GLOBAL COOPERATION
The development of the core tax system module had been completed in 2022.
The activities in 2023 focus on the completion of training, testing, as well as outreach and education to DGT’s offices and employees. DGT’s resources will be meticulously prepared for the implementation of the core tax administration system in 2024.
Remarks by 37
Director General of Taxes
2022 AnnualReport
DGT has a mandate to collect tax revenues in 2023 amounting to Rp1,718.03 trillion, increasing around 16 percent of the tax revenue target in 2022. The global geopolitical situation, which has yet to improve, commodity price moderation, and disruption of global supply chains will overshadow DGT’s voyage in tax collection in 2023.
Factors that positively stimulated tax revenues last year, such as increases in commodity prices and Voluntary Disclosure Program, will not be repeated in 2023. However, we see opportunities that must be capitalized on as much as possible. It is envisaged that the positive movement of national economic recovery along with the lifting of the Covid-19 pandemic status in Indonesia will spur the economy and subsequently have an impact on the tax