Abstract
The vast amount of taxpayer and the limited resources in Indonesian Tax Authority (DJP) to monitor the taxpayer, require DJP to plan tax audit optimally. This study aim to analyze the effectifity of Compliance Risk Management (CRM) policy in DJP. This study is using qualitative approach through interview with 7 peoples who have roles in implementing tax policy in Indonesia. This study founds the importance of CRM policy, in which the tax authority cannot apply the same treatment to all taxpayers, so it needs to decide which taxpayer needs to be investigated with rational justification based on risk level. Tax authority needs to focus on implementing CRM as an important source of information in decision making process.
Highlights
The issue of taxpayer non-compliance is a serious challenge faced by tax authorities in achieving revenue and hindering tax performance
This study aims to analyze the effectiveness of Compliance Risk Management (CRM) policies implementation within the Directorate General of Taxes of the Republic of Indonesia in increasing the level of tax compliance and the effectiveness of tax revenues
CRM development at Directorate General of Taxes (DGT) is driven by the lack of a data-based Decision Support System, not optimal data-based analysis, limited resource allocation and high workload, low understanding of taxpayer compliance behavior, and the need for a systematic process to identify taxpayer compliance risks to ensure that taxpayer compliance can be carried out more objectively, transparently and fairly
Summary
The issue of taxpayer non-compliance is a serious challenge faced by tax authorities in achieving revenue and hindering tax performance. One of the efforts made by the government to improve compliance is by imposing tax sanctions. The application of tax sanctions is aimed at creating taxpayer compliance. Hopkin (2014) state that heavier sanctions can improve tax compliance as long as the procedure is seen as fair by the public. According to Chooi (2020), the effort to increase taxpayer awareness to pay taxes is the core of tax regulations and the imposition of sanctions in the field of taxation. The taxpayers’ knowledge about tax sanctions is still very minimal so that the government needs to play an active role in communicating the tax regulations and its consequences for non-compliance
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