Effectiveness of Tax Dispute Resolution in the Core Tax Administrative System (CTAS)

The Indonesian Directorate General of Taxes (DGT) has implemented the Update of Core Tax Administration System (CTAS) on July 1, 2024, simultaneously with the implementation of the integration of the Population Identification Number (NIK) as the Taxpayer Identification Number (NPWP). This system will be fully implemented in January 2025. According to the Tax Supervisory Committee (Komwasjak), the CTAS offers various benefits, both for taxpayers and tax authorities, including the potential to reduce tax disputes. To delve further into this system, we will provide an overview of the effectiveness of tax dispute resolution through the core tax system implementation.

General Overview

Presidential Regulation (Perpres) Number 40 Year 2018 regulates the development of CTAS as an information technology that supports the DGT's duties and provides convenience for taxpayers by automating business processes such as processing tax returns, tax documents, tax payments, and billing. The design of CTAS also incorporates audit processes, preliminary evidence audits (bukti permulaan), investigations, compliance risk management (CRM), business intelligence, document management systems, data quality management, objections and appeals processes, non-objections processes, supervision, assessments, educational services, and knowledge management.
The primary purpose of implementing CTAS is to streamline tax administration for taxpayers, eliminating the need for them to physically visit the tax office. In addition, it will also assist the DGT in integrating tax business processes, which currently have separate applications and systems. From a tax consultant's perspective, CTAS will streamline the tax dispute resolution process in terms of document submission. However, tax disputes cannot be completely resolved online, direct communication with the DGT is also needed, so that explanations from Taxpayers will be more comprehensible.
The Regulation of the Minister of Finance (PMK) Number 9 Year 2013 and PMK Number 202 Year 2015, which governs the Procedures for Filing and Resolving Objections, allows taxpayers to discuss and clarify necessary matters or submit necessary documents related to the objection process within 15 working days and 10 working days (25 days).
This means that direct communication with the DGT in resolving tax disputes is very much needed to provide a formal & sufficient explanation. Therefore, the challenge is that taxpayers must be able to document administration related to the business digitally if the CTAS has been implemented. This approach will help in reducing paper use, particularly during the documentation process, such as supporting documents needed for audits, objections, and/or appeals.

The Benefits and Challenges of the New Core Tax System

From our perspective, the DGT can establish CTAS as a dependable, secure, and trusted digital system that taxpayers can easily access for more efficient tax administration tasks, including dispute resolution.
Furthermore, the biggest challenge for the DGT is to comprehensively educate all taxpayers in Indonesia—which has a large territory—of the convenience of CTAS. In addition, the DGT needs to allocate enough human resources to provide excellent online services to taxpayers. For socialization regarding CTAS, the DGT may use social media platform services, such as YouTube, TikTok, and other platforms, to easily disseminate educational content related to the implementation of CTAS. In our opinion, this also be done in collaboration with tax consultants through associations like IKPI, AKP2I, and others.