Implementation of the Core Tax System: Impacts and Challenges on Tax Revenue in Indonesia

Abstract

Tax revenue is the main source of state revenue which is very vital to finance national development in Indonesia. However, the tax administration system in Indonesia still faces various challenges, such as slow administrative processes, inaccurate data, and low levels of taxpayer compliance, which have an impact on the suboptimal state tax revenue. To overcome these problems, the Directorate General of Taxes (DGT) implements the Core Tax System (Coretax), an integrated information technology-based tax administration system. This study aims to evaluate the impact of the implementation of Coretax on tax revenues and identify the challenges faced in its implementation in Indonesia. The research method used is a qualitative approach with literature review and analysis of secondary data from various sources, including official government reports, scientific journals, and relevant articles. The results of the study show that the implementation of Coretax has a positive impact in the form of increasing administrative efficiency, transparency, and accuracy of tax management. Coretax also accelerates the tax reporting and payment process, improves data quality, and strengthens taxpayer supervision and compliance. However, in the early stages of implementation, this system faced a number of challenges, such as technical constraints, limited infrastructure, resistance from taxpayers and employees, and adaptation of business processes, especially in the informal sector and MSMEs. Nonetheless, Coretax is expected to be a major breakthrough in reforming Indonesia's tax administration, improving tax revenue, and strengthening public trust in tax authorities. This study recommends the need to increase socialization, training, and assistance for taxpayers as well as strengthen technology infrastructure to support the success of the overall implementation of Coretax.