Page 9 - Indonesia Taxation Quarterly Report (Q4-2019)

Executive Summary

products per 1 January 2020. Under on tax revenue collection, i.e., how to get
this provision, the excise rates and retail paid by those extended tax base. .
sale prices of several types of tobacco
products have increased by 23% and 35%
respectively. In addition, government According to OECD, changes in how
also plans to restipulate the retail sale revenue bodies are operating today
price thresholds for electric cigarette. could affect CRM framework. Four
aspects of the changing tax compliance
environment are: (i) the hugely increased
Anticipating Compliance availability of data; (ii) sharpened
Risk Management targeting of risks; (iii) co-operative
compliance and transparency; and (iv)
increased automation of compliance
Generally, CRM can be defined as
systematic process of identification, checks.
assessment, rating, and appropriate
treatment of risk. By acknowledging In the age of data, risk analysis utilizes the
those risks comprehensively, hopefully abundance of information retrieved from
CRM will lead to better treatment tax-related sources such as individual
strategies for each of those risks. In income tax administration, VAT invoices,
2004, OECD developed CRM process export tax rebates, until financial-related
that consist of: (i) identifying risks; (ii) data such as credit card information,
assess and prioritise risks; (iii) analyse ATM cash withdrawals, banks, payment
compliance behavior; (iv) determine service providers, and cryptocurrency
treatment strategies; and (v) plan and exchanges. This integrated information
implement strategies. Last but not least, could sharpen targeting of risks,
to ensure framework’s sustainability, the increasing the probability of transforming
framework’s progress is also need to be data into insight, thus will likely to
evaluated and monitored consistently increase the probability of targeting the
due to vulnerability caused by external correct taxpayers. Also, the introduction
factors of dispute’s substitution scheme
portrayed in co-operative compliance,
and the use of robot-tax (automation)
Several countries in Asia and Pasific
have enacted, whole or partially, the in the tax system, make the whole tax
framework of formal CRM processes. administration system more effective
In Denmark, the Danish Tax & Customs and efficient.
Administration started implementing
a new compliance strategy in 2007 Hence, staff in tax centers of revenue
and it was purposely designed to authority must be equipped with
strike a balance between traditional adequate data management as
enforcement activities and innovative well as information-related skill and
treatments in order to arrive at high should be balanced with excellence
levels of compliance and high customer communication skill in order to be
satisfaction. Further, the risk database is adaptable to the changing environment
also used as benchmark for their CRM and implementing CRM in an appropriate
framework. manner.

In Indonesia, CRM process is divided The Future of Local Tax
into extensification, examination & under Taxation Omnibus
supervision, and billing functions. Each
function contains several phases in Law

which could determine its own output.
In brief, extensification focuses on It has been stated that the government
the extend of existing tax base, that plans to re-regulate the interplay of local
could be potentially extracted to be tax and retribution under the omnibus
considered as new taxpayer. Meanwhile, tax law, whose objective is to boost
examination & supervision related to the investment in the country. General
ongoing process after extensification Director of Fiscal Balance has stated,
phase, more or less maintaining current nevertheless, that the local government
situation. Lastly, billing function focuses will remain as the holder of the authority.

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