Big Data and Our Tax Ratio

Facing the challenges of increasing crime rates, prison overcrowding, and high recidivism, in 2010 the Malaysian government found creative solutions to the prison problem. The Malaysian government stopped using global practices as a benchmark. They realize that it is a shift in strategy and organizational focus that can break the vicious cycle of imprisonment and crime reduction.

The solution they took was not by building expensive prisons, the government established Community Rehabilitation Program (CRP) centers on idle lands of former military bases. This strategy succeeded in reducing crime rates in Malaysia and the government managed to save a very significant state expenditure.

The strategy implemented by the Malaysian government is described by W Chan Kim and Renee Mauborgne in Blue Ocean Strategy; Blue Ocean Shift. Blue Ocean Strategy formulates a view of the nature of the market which consists of two types of oceans, namely: red oceans and blue oceans. Red oceans are all the industries that exist today where most organizations are fighting. Blue oceans are all uncreated industries, where profit and growth are more and more happening.

If it is drawn into the realm of taxation, the Directorate General of Taxes for the past five years seems to be stuck in a red ocean due to several obstacles. It can be seen from the tax ratio that Indonesia is the smallest compared to other countries in the Asia Pacific. In fact, Indonesia’s tax ratio has touched its lowest at 10.7% in 2017. The low tax ratio of a country is an indicator if taxpayer compliance in that country is still low.

The key to improving the compliance of the self-assessment system is the availability of quality data that can be used to test the correctness of filling out a taxpayer’s tax return. To that end, Article 35A of the Law on General Provisions and Taxation (KUP) states that every government agency, institution, association, and other party (ILAP) is obliged to provide data and information to the Directorate General of Taxes. The flowing ILAP data cannot be processed using traditional methods, but must be processed using the Big Data concept.

An example of Big Data is data that is up to petabytes (1,024 terabytes) or exabytes (1,024 petabytes). It’s like billions to trillions of personal records of a person all coming from different sources like social networks, marketplaces, customer data, social media, phone numbers and so on.

This data is usually unstructured, often incomplete and inaccessible. Therefore, the Directorate General of Taxes is accelerating the Reform of the Tax Administration System (PSIAP) in 2021, so that the new system will be more accommodating to the Big Data concept.

The data is not integrated, resulting in taxpayers not being able to find out their tax rights and obligations directly online. Although most services at the Directorate General of Taxes can indeed be done online, such as NPWP registration and SPT reporting via e-Filing, taxpayers only find out if they have tax debts, for example when a Tax Assessment Letter (SKP) has been issued by the Tax Service Office (KPP). and sent to the address of the taxpayer.

Acceleration of the information system is carried out to offset the start of the era of economic digitization. The rise of the digitalization era is marked by the pattern of community activities that changed massively towards digital after the Covid-19 pandemic hit. More and more business actors are taking advantage of the pandemic momentum to switch to digital.

The Directorate General of Taxes caught the signal of the shift in community activity patterns as a momentum to shift the organization’s strategy and focus to the blue ocean, by accelerating reform of information systems that are adaptive to the digital era.

Information Technology and Databases is one of the pillars targeted by the Directorate General of Taxes reform, in addition to the other four pillars, namely: Organization, Human Resources, Business Processes, and Legislation Invitation. The legal umbrella for carrying out tax reform itself is contained in Presidential Regulation Number 40 of 2018. The target is that by 2024 the Directorate General of Taxes will have nationally integrated information technology.

Later, the services provided by the Directorate General of Taxes will be divided into three types, namely: Click, Call, Counter (3C). Click is a tax service that is carried out automatically through a machine through a website, car application, or other service without going through the help of a tax officer. Now, this Click will be like the ease of service provided by banks to their customers.

Single Identity Number

With this Click service, in one click, taxpayers can find out their rights and obligations directly and fulfill their obligations online. Meanwhile, for the Tax Apparatus, apart from being easy to supervise tax compliance, it can also map the untapped tax potential.

With the concept of Big Data in the era of the Internet of Thing (IoT), the Directorate General of Taxes will be connected with all the activities that taxpayers do in their daily lives. It’s like opening an information window with just one click. Collecting data in this era of economic digitization will be easier if the Single Identity Number (SIN) has been implemented.

SIN is a unique identity that each individual has. SIN does not only contain individual identities, but also other information related to family data, asset ownership, police data, banking, taxes, and many others. The integrated population data has been implemented in the United States, known as the Social Security Number.

With the integration of population data, a SIN owner can no longer evade not owning property or owning a business, when his digital footprint makes sales transactions at the market shop or buys assets online. This information in one door will facilitate the Tax Apparatus in conducting supervision. Tax officials can focus more on services and counseling, so that audit activities can be minimized.

The digitalization of the economy provides both hope and challenges for the world of taxation. Bank Indonesia recorded a 24.4% (year on year/yoy) increase in the value of digital transactions to Rp16 trillion in July 2020, from the same period the previous year of Rp12.9 trillion. The highest increase in transactions occurred when a number of regions imposed large-scale social restrictions (PSBB) in April 2020, which rose 64.5% (yoy) to Rp 17.6 trillion.

Meanwhile, the e-conomy SEA 2019 research conducted by Google, Temasek, and Bain and Company shows the potential of Indonesia’s digital economy in 2019 worth US$40 billion. By 2025 it is projected to increase to US$133 billion, the largest in Southeast Asia. Without a reliable information system and one-stop integration of information through the application of SIN, the scattered data will not mean much.

It’s just that the challenge of integrating scattered data across several agencies in a national system, not only requires large funds, but also requires synergy from all relevant agencies. Uniting taxation data (NPWP), population data, and immigration data, for example, requires the synergy of relevant agencies by putting aside sectoral egos.

A reliable information system that is able to accommodate the concept of Big Data and the use of SIN is an opportunity for the Directorate General of Taxes to expand the tax base and improve taxpayer compliance in the era of economic digitization. The bottom line is that Indonesia’s tax ratio will increase in the future.

Sumber https://pajak.go.id/id/artikel/big-data-dan-rasio-pajak-kita

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