Arya News - Fully implemented at the turn of the year, Coretax is a new tax administration system that is meant to tame Indonesia’s notoriously complicated taxation jungle, which can then translate into improved compliance and increased revenue.
JAKARTA – Indonesian businesses have expressed frustration about the many problems they have encountered with the newly rolled out digitalized taxation administration system called Coretax.
Indonesian Taxpayers Association (IWPI) chairman Rinto Setiyawan said on Sunday that many businesses were facing serious technical issues that led some to the brink of operational closure.
“Some called me the other day; their [businesses] are about to be closed because they can’t generate invoices [and thus] they can’t collect [payments],” Rinto was quoted as saying by Kontan .
Fully implemented at the turn of the year, Coretax is a new tax administration system that is meant to tame Indonesia’s notoriously complicated taxation jungle, which can then translate into improved compliance and increased revenue.
However, businesses have reported that the system is not fit for purpose. One unspecified business in South Jakarta, for instance, expressed frustration as Coretax was often unstable and only caused trouble for businesses, according to a report compiled by the IWPI.
Another business from the manufacturing sector said that Coretax often ended up loading blank pages or responding slowly, which ate up time.
Indonesian Employers Association (Apindo) taxation committee chairman Siddhi Widyaprathama said on Jan. 23 that the new system was promising compared with the existing ones, but the scale of the problems had become a headache for businesses, as quoted from Kontan .
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Finance Minister Sri Mulyani Indrawati offered an apology in an Instagram post on Sunday after many complained about the Coretax implementation.
“To all taxpayers, I express my apology and gratitude for your understanding and input throughout this transition period,” she wrote, referring to the Coretax implementation.
She stressed that the ministry’s Taxation Directorate General would endeavor to repair faults and address the Coretax problems.
She said that challenges would surface when implementing a new system “but it’s all a part of building a taxation system that is more integrated, efficient and accountable”.
The system costs over Rp 1.2 trillion (US$73.89 million) to build, far below the planned allocation of around Rp 3 trillion. The ministry has worked on the project since 2021, involving several consultancy and technology firms, including PT PricewaterhouseCoopers (PwC) as procurement agent.
In response to the myriad of problems, the IWPI decided to report Coretax to the Corruption Eradication Commission (KPK) upon findings of probable corruption in the project.
The IWPI’s Rinto said in a press statement released on Jan. 23 that he had handed over evidence of alleged corruption in the Coretax procurement throughout 2019 to 2024, which includes complaints from businesses, auction winner announcements and letters from the Taxation Directorate General, which permitted use of the old tax reporting portal instead of Coretax in certain cases.
Taxation law expert Alessandro Rey was cited in the same statement as saying that the malfunction in the new system would ultimately cost taxpayers, who would become subject to punishment for not generating proper tax invoices, given that the tax office has not issued a regulation that would cancel any fines.
“A megaproject costing Rp 1.3 trillion should have not brought such issues. […] Therefore, there’s an indication of corruption here,” said Alessandro.
The Taxation Directorate General spokesperson Dwi Astuti said in a statement on Thursday that it had fixed technical issues in registration, payment, taxation services, tax return reporting and data management.
Improvements were also made to address problems when uploading files, signing tax invoices, validating as well as generating authorization codes and one-time passwords.
Separately, Dwi also assured in Jan. 10 that taxpayers should not worry about fines as her office was drafting a regulation that would cancel the administrative sanctions for failing to meet the deadline of tax invoices and filings during the transition period, as quoted from DDTC News.
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Nailul Huda, director for digital economy at the Center of Economic and Law Studies (CELIOS), told The Jakarta Post on Thursday that the government was “too hasty” in launching the system. He claimed that the system was given the go ahead without any “proper test”, whether in terms of quality assessment or computer programming.
“If the Coretax application cannot be optimized, it will become just another unused government digital product. […] The people and I, of course, hope that Coretax will become the government’s tool to minimize tax evasion. But when the system is awful, my and everyone’s hopes vanish,” said Nailul.