The Influence of Tax Collection on Increasing the Tax Revenue (A Case Study at the Directorate General of Taxes Headquarters)
Vania Rakhmadhani
Faculty of Economics, STIE EKUITAS, Bandung, Indonesia
*Corresponding Author: [email protected] Accepted: 1 June 2020 | Published: 15 June 2020
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Abstract: The issuance and settlement of tax bills for 2008-2015 showed that there was a gap that was quite far and not balanced with the total repayment available. The purpose of this study is to examine the effect of the tax collection on increasing the tax revenue. The population in this study is the tax collection and tax revenue reports that are registered with the Directorate General of Taxes. The sample used is from 2008-2015. The sampling method used is the probability sample, while the data processing method uses simple linear regression analysis. The results of hypothesis testing conducted show that the tax collection affects the increase in the tax revenue.
Keywords: Tax Collection, Tax Revenue
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1. Introduction
National development is an ongoing and continuous activity aimed at improving the welfare of the people both materially and spiritually. Achieving these objectives required a lot of attention to the problem of financing the intended development. One of the ways to actualize the independence of a nation in financing national development is to exploit funding sources within the country in the form of taxes. Taxation main purpose is to fuel the development for the common good (Waluyo 2008: 2).
Based on data from the Central Statistics Agency (BPS), annual state revenue performance from 2008-2015 can be seen as in Table 1
Table 1: National Tax Revenue Year 2008-2015 (in billion rupiah)
Income Resource 2008 2009 2010 2011 2012 2013 2014 2015
1. Tax Revenue 658,701 619,922 723,307 873,874 980,518 1,077,306 1,146,865 1,240,418 a. Domestic Tax 622,359 601,252 694,392 819,752 930,861 1,029,850 1,103,217 1,205,478 1) Income Tax 327,498 317,615 357,045 431,122 465,069 506,442 546,180 602,308 2) Value Added Tax
(VAT)
209,647 193,067 230,605 277,800 337,584 384,713 409,181 423,710 3) Land and Building
Tax
25,354 24,270 28,581 29,893 28,968 25,304 23,476 29,250
4) Land and Building Duty Payment
5,573 6,465 8,026 -1 0 0 0 0
5) Excise 51,252 56,719 66,166 77,010 95,027 108,452 118,085 144,641
6) Other Taxation 3,035 3,116 3,969 3,928 4,210 4,937 6,293 5,568
b. International Trade Taxation
36,342 18,670 28,915 54,122 49,656 47,456 43,648 34,939
1) Import Duty 22,764 18,105 20,017 25,266 28,418 31,621 32,319 31,212
2. Non-Tax Income 320,604 227,174 268,942 331,472 351,804 354,751 398,590 255,628 1) Natural Resource
Income
224,463 138,959 168,825 213,823 225,844 226,406 240,848 100,971 2) State Entreprises
Profit Income
29,088 26,050 30,097 28,184 30,798 34,025 40,314 37,643
3) Other Non-Tax Income
63,319 53,796 59,429 69,361 73,458 69,671 87,746 81,697
4) BLU Income 3,734 8,369 10,591 20,104 21,704 24,648 29,681 35,315
Total 979,305 847,096 992,249 1,205,346 1,332,322 1,432,057 1,545,455 1,496,046 Source : www.bps.go.id
Several attempts have been performed by the government in the context of increasing tax revenue, including carrying out tax reform. The main objective of tax reform is to further uphold the independence of the state in financing national development by directing all the potential and capabilities of the country, (Diana Sari 2013: 6).
After tax bills (SPT) is reported, tax authorities examine and or check whether the reported SPT is complete, correct and clear. This inquiry is conducted to assess the completeness SPT reporting and its attachments including an assessment of writing accuracy and calculations exactitude. Thus, if the taxpayer commits no formal violations, such as violating the timeliness of tax payments, filling the tax return and its attachments faultlessly, including the exactness of its writing and calculation, then the taxpayer will not be given a sanction and the results do not need to be notified to the taxpayer. However, if authorities find violations, then taxpayers will be subject to sanctions in the form of fines or interest that will be billed on their respective tax bills (SPT). Tax collection notice or tax bill (STP) is a statement letter of tax collectible and/or administrative sanctions in the form of interest or penalties. Tax bill (STP) has the same legal force as a tax assessment letter (SKP) (Diana sari, 2013: 244).
The following is the tax collection data (STP) that has been issued during the year 2008-2015 in Table 2
Table 2: Issuance and Repayment of Tax Collection Notice (STP)
Tahun Number of STP Issued Number of STP Paid % of STP Paid compared to STP Issued
2008 463,447 380,715 82.15
2009 535,742 432,968 80.82
2010 641,654 447,935 69.81
2011 660,250 402,439 60.95
2012 617,585 385,023 62.34
2013 655,942 373,280 56.91
2014 562,890 241,640 42.93
2015 151,276 41,617 27.51
Source: Directorate of Taxation Information Technology, Data and Information Management Section
Based on Table 2, it is observed that the issuance of tax bill (STP) is not balanced with the total existing payment. If taxpayers repay the tax bill, then it will further increase the targeted tax revenue because in addition to paying off payments, there are also fines or interest which automatically boost the amount of payment collectible from them.
Based on said phenomenon, the author is compelled to conducting research “The Influence of Tax Collection on Increasing the Tax Revenue (A Case Study at the Directorate General of Taxes Headquarters).
Research Question
Is there any impact of tax collection towards the increase of tax revenue at Directorate General of Taxes Headquarters?
2. Literature Review
Tax Collection
The definition of tax collection according to Article 1 number 9 in Law No. 19 of 2000 concerning Tax Collection by Distress Warrant is:
"Tax collection is a series of actions so that the tax bearer repays debt and tax collection costs by reprimanding or reminding, carrying out billing at once and outright, notifying distress warrant, proposing deterrence, carrying out seizure, hostage, and selling confiscated goods."
Tax Revenue
According to John Hutagaol (John Hutagaol, 2007: 325) Tax Revenue is:
"Sources of revenue that can be obtained continuously and can be foster optimally according to government needs and society conditions".
According to Euphrasia Susy Suhendra (Euphrasia Susy Suhendra, 2010) the increase in tax revenue is measured by the amount of tax retrieved in the current tax year in a nominal scale.
3. Research Methods
Research objects in this study are tax collection and tax revenue. This research was conducted at the Directorate General of Taxation (DGT) Jalan Jenderal Gatot Subroto Kav 40-42, South Jakarta 12190, and the type of research adopted was secondary research. The population used by the author was the tax collection and tax revenue data available at the Directorate General of Taxation (DGT) Jalan Jenderal Gatot Subroto Kav 40-42, South Jakarta 12190. Eight periods data applied were from year 2008 to 2015.
Simple Linear Regression Y = α + βX1
Y = Increase in tax revenue α = a Constant
Β = Regression coefficient X1 = Tax Collection
4. Research Results And Discussion
General Depiction of Tax Collection by the Directorate General of Taxation (DGT) Based on observations of Tax Arrears and Disbursement after tax collection was carried out by the Directorate General of Taxation in 2008-2015, the result can be seen in Table 3 below:
Table 3: Disbursement of Tax Arrears after Tax Collection at the Directorate General of Taxation (DGT) Year Tax Arrears Tax Arrears Disbursed
% Tax Arrears Disbursed compared to Tax Arrears
Collectible 2008 Rp 6,210,077,539,555 Rp 5,243,156,289,910 84.43 2009 Rp 5,992,042,823,135 Rp 4,866,161,115,422 81.21 2010 Rp 8,254,782,323,982 Rp 6,040,397,412,601 73.17
2012 Rp 7,650,145,436,776 Rp 4,999,038,426,702 65.35 2013 Rp 3,552,391,397,273 Rp 2,166,415,692,194 60.98 2014 Rp 2,053,708,192,142 Rp 943,205,794,042 45.93 2015 Rp 278,201,094,441 Rp 79,032,467,256 28.41
Rata-rata 63,45
Source: Directorate of Taxation Information Technology, Data and Information Management Section (data was reprocessed)
Figure 1: Disbursement of Tax Arrears after Tax Collection at the Directorate General of Taxation (DGT)
Based on Table 3 and Figure 1 disbursement of tax arrears after tax collection in 2008 to 2015 amounted to 63.45%. Disbursement of the highest tax arrears in 2008 was 84.43% with the payment of tax arrears amounting to Rp 5,243,156,289,910, and the lowest in 2015 of 28.41% with the payment of tax arrears amounting to Rp 79,032,467,256. Disbursement of tax arrears from 2008 to 2015 has decreased from year to year, this proves that taxpayers have not complied in paying tax arrears.
General Depiction of Tax Revenue by the Directorate General of Taxation (DGT)
Based on observations of the amount of tax revenue by the Directorate General of Taxation (DGT) from 2008 to 2015, the target and realization of tax revenue can be seen in Table 4 below:
Table 4: The Amount of Tax Revenue by Directorate General of Taxation (in billion rupiah)
Year Target Realization
% Tax Revenue Realized compared to Targeted Tax Revenue
2008 Rp 609.227 Rp 658.701 108,12
2009 Rp 651.954 Rp 619.922 95,09
2010 Rp 743.000 Rp 723.300 97,35
2011 Rp 878.600 Rp 873.874 99,46
2012 Rp 1.016.200 Rp 980.518 96,49
2013 Rp 1.139.300 Rp 1.099.000 96,46
2014 Rp 1.246.100 Rp 1.146.865 92,04
2015 Rp 1.296.000 Rp 1.240.418 95,71
Rata-rata 99,06
Source: Directorate General of Taxation, various resources reprocessed.
- 1,000,000,000,000 2,000,000,000,000 3,000,000,000,000 4,000,000,000,000 5,000,000,000,000 6,000,000,000,000 7,000,000,000,000 8,000,000,000,000 9,000,000,000,000 10,000,000,000,000
Tax Arrears Tax Disbursement
Figure 2: The Rate of Tax Revenue at the Directorate General of Taxation
Based on Table 4 and Figure 2 the rate of tax revenue at the Directorate General of Taxation (DGT) in 2008 to 2015 has changed from year to year. With sunset policy, the tax revenue target was reached in 2008 at 108.12%. The lowest tax revenue occurred in 2014 with a contribution of 92.04%. There are still many tax revenue targets that have not been reached, this proves that taxpayer awareness in carrying out their tax obligations is still lacking and must be further improved. And tax apparatus must further improve its performance hence targeted tax revenue can be achieved.
Effects of Tax Collection on Tax Receipts
Based on the test results of a simple linear regression analysis, the effect of tax collection on tax revenue with SPSS 20 can be seen in Table 5 as follows:
Table 5
Simple Linear Regression Analysis Results Coefficientsa
Model Unstandardized Coefficients Standardized Coefficients
T Sig.
B Std. Error Beta
1
(Constant) 490.757 104.162 4.711 .003
Tax
Collection 26.076 5.841 .877 4.464 .004
a. Dependent Variable: Tax Revenue Source: Data processed by SPSS 20
The following is the regression model formed:
Y = 490,757 + 26,076 Tax Collection
From the regression model, its interpretation might be explained as follows:
1. A constant value of 490,757 means that if the independent variable which is tax collection is worth 0 (zero) and there is no change, then tax revenue will be worth 490,757, or in other
0 200000 400000 600000 800000 1000000 1200000 1400000
2008 2009 2010 2011 2012 2013 2014 2015
Series 1 Series 2
words the dependent variable that is tax revenue without being influenced by the independent variable has a value of 490,757.
2. The value of tax collection is 26,076, meaning that if the tax collection variable has increased by 1 or getting better, then tax revenue will increase even higher by 26,076.
4. Discussion
The Influence Of Tax Collection On Increasing The Tax Revenue
Based on the results of the t test (partial) in the regression model, the value of the tax collection variable was obtained at 0.004 <0.05 level of significance. As conceivably seen from the comparison between tcount and ttable which shows the result of tcount is 4.464 while ttable shows the value of 1.694. From these results it can be noted that tcount> ttable is 4,464> 1,694, thus safely concluded that Ha1 is accepted. This research outcome is drawn as follows: the higher tax arrears disbursement is paid off, the more tax revenue by the Directorate General of Taxation (DGT) will be achieved. This study supports research from Putu Putra Mahendra et al (2014) that Tax Collection has a positive effect on increasing tax revenue.
From the disbursement of tax arrears itself, the results will definitely affect the tax revenue.
However, the amount of existing tax revenues still cannot exceed the assigned target even though the tax collection activities have been attended. One obstacle in tax collection is taxpayers willingness to pay is still lacking for various reasons, some try to avoid tax officials and avert from tax officers when tax collection is done. There are also taxpayers who violently resistant to tax officers for not accepting the amount billed by the DGT. These counterproductive responses effectively continue the ineffectiveness of existing tax collection hence further hindering from optimal tax revenue. Therefore, it is suggested that any form of tax collection perfomed by tax officers is accompanied by police force, in the hope of tax collection activities will be complied easier. By collaborating with the police authorities, obstacles encountered can be professionally handled, and tax collection activities might be executed accordingly to procedures. This method also exerts deterrent effects for taxpayers who attempt to physically refrain from their duties because with the assistance of the police authorities the safety tax officer will be guaranteed.
5. Conclusion
Based on partial testing, it is known that tax collection affects the increase in tax revenue at the Directorate General of Taxation (DGT)
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