Ineffective, DGT to Shift from Tax Enforcement to Cooperative Compliance

JAKARTA. To improve taxpayer compliance, the Directorate General of Taxes (DGT) will shift from a tax enforcement approach to cooperative compliance.

Under the tax enforcement model, the tax authority prioritizes legal action against non-compliant taxpayers. In contrast, cooperative compliance encourages taxpayers to implement tax risk management within every aspect of their business processes.

Director General of Taxes, Bimo Wijayanto, stated that this shift is being made because the enforcement approach is no longer effective, especially given the increasing complexity of today’s transactions and economic activities.

He also noted that cooperative compliance will help reduce the number of tax disputes, positioning taxpayers not as adversaries of the DGT but as partners.

He delivered these remarks during a tax seminar titled “Reinventing Tax Compliance: From Enforcement to Cooperative Compliance” at the University of Indonesia on Monday (17/11).

Development of the Tax Control Framework

Meanwhile, at the same event, Iwan Djuniardi, Expert Staff for Tax Regulation and Law Enforcement at the Ministry of Finance, stated that to implement the cooperative compliance approach, the Ministry is currently developing a Tax Control Framework (TCF).

The purpose of the TCF is to establish a tax risk management system that can be jointly used by the tax authority and taxpayers. In the future, TCF will become an integral part of internal control systems and help manage tax-related risks more effectively.

“Until now, tax supervision has been conducted after the Annual Tax Return (SPT) is filed. With the TCF, supervision will occur beforehand, so disputes will no longer arise,” said Iwan on Monday (17/11).

He also revealed that a TCF prototype has already been prepared, although he could not confirm when the policy would officially be launched. (ASP/KEN)