Vol. 5 No. 2 (2024): April: Strengthening Tax Reform in Today's Ever-Changing Global Era

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In today's ever-changing global era, the Directorate General of Taxes (DGT) is fully committed to strengthening tax reform in Indonesia to become a credible, accountable, and robust institution. Tax reform in Indonesia begins with implementing a self-assessment approach to encourage voluntary tax compliance. A study titled Similarity Index for Estimating Tax Reform Program and Its Impact on Tax Revenue: Indonesia Case Study uses the tax structures of 16 developed countries as a benchmark to assess Indonesia's tax reform progress over the past 40 years.

It is common for individuals, businesses, and assets to cross international borders. However, this can sometimes lead to tax avoidance, resulting in lost income for the country of origin. To address this issue, many countries have implemented exit taxes or charges to prevent revenue loss. "Exit Tax Adoption to Protect Indonesia's Tax Base: Are We Ready?" is a study that examines the implementation of exit taxes in Indonesia and provides recommendations for their integration into the current tax system. Additionally, as companies increasingly operate in multiple countries and engage in international trade, they often use transfer pricing to optimize their tax liabilities. However, the impact of domestic transfer pricing correction on national tax revenue is still a matter of debate, as described in the study Domestic Transfer Pricing Adjustments: A Zero-Sum-Game of State Tax Revenue? A Tax Supervision Case Study in the Tax Office.

Furthermore, tax avoidance can also occur due to the increasing focus on environmental, social and governance (ESG) performance in the business world. Beyond Sustainability: The ESG Performance Relationship on Earnings Management and Tax Avoidance examines the relationship between ESG performance, tax avoidance, and earnings management using a sample of 60 companies from 2018 to 2022. Similarly, Impact Street Earnings on Tax Avoidance analyzes the impact of street earnings on tax avoidance in manufacturing companies from 2015 to 2020.

Tax avoidance activities continue to pose a challenge in optimizing tax revenues. Evading tax obligations can reduce overall tax compliance and may also cause psychological burdens for taxpayers, limiting their knowledge, intention, and ability to pay a fair amount of taxes. Momen untuk Patuh: Kepatuhan Pajak melalui Formulir Prefilled dalam Eksperimen Laboratorium attempts to determine the impact of prefilled forms on tax compliance decisions made by individuals who calculate their income taxes using the turnover presumptive tax system.

Finally, the increasing use of digital transactions has led several countries to impose Digital Service Tax (DST) on the gross revenue of digital enterprises rather than on profits. Kebijakan Pajak dalam Perdagangan melalui Sistem Elektronik: Mengupas Pro dan Kontra Digital Service Tax provides a narrative literature review of 20 pieces of national and international literature published from 2019 to 2023 to find a policy design for DST that can accommodate the pros and cons.

Of all the aspects of continuous improvement in the tax system, socialization carried out by the Directorate General of Taxes is one of the most crucial factors in increasing taxpayer compliance. Along with Indonesia ranking 10th worldwide in daily social media usage, Twitter serves as the primary platform for disseminating tax-related information. By exploring the various factors that impact engagement via multiple linear regression, Engagement Twitter DJP: Apa Saja yang Mempengaruhinya? offers valuable insights into boosting the efficiency of tax information dissemination on Twitter.

Recent studies have identified areas for improvement in the Directorate General of Taxes tax system, which is crucial to reinforce tax reforms. Optimizing the tax system will lead to greater efficiency and fairness, and we must work together to strengthen tax reform in today’s ever-changing global era.