DIRECTORATE GENERAL OF TAXES IN INDONESIA

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Historical Evolution and Impact

Originating from a fusion of disparate tax entities, the Tax Directorate General traces its lineage to pivotal legislative decrees. This evolutionary journey symbolizes its metamorphosis into a linchpin of the Ministry of Finance, catalyzing expansive fiscal horizons.

In Indonesia, the government agency that is responsible for implementing taxation policies in the country is known as the Tax Directorate General or Direktorat Jenderal Pajak.

What the Directorate General of Taxes (DGT) Does

Besides implementing the local tax policies, this government agency is also responsible for standardizing the technical aspects in the tax field. As an agency that is part of the Ministry of Finance, the Tax Directorate General is one of the country’s main economic drivers.

The Tax Directorate General is responsible for staying ahead of the curve. It is also responsible for capturing future opportunities in the digital era that continues to expand and grow. As such, the agency needs to utilize solutions to help transform its IT infrastructure, platforms, and systems in Indonesia. This helps to drive businesses and provide better e-services to the local taxpayers in the country.

The duties of the Directorate General of Taxes in accordance with the mandate of the Minister of Finance Regulation Number 234 / PMK.01 / 2015. This concerns the Organization and Work Procedures of the Ministry of Finance, and it is their responsibility to formulate and implement policies and technical standardization in the field of taxation.

Roles, Responsibilities and Functions of 

As per Ministry of Finance Regulations No. 234/2015 and No. 210/2017, the Tax Directorate General is mandated with:

• Formulating and implementing tax policies and technical standards
• Preparing tax administration norms, procedures, criteria and evaluation guidelines
• Providing tax-related technical guidance and recommendations
• Managing Tax Directorate General’s administrative operations

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This enables Tax Directorate General to secure tax revenues by expanding Indonesia’s tax base and increasing taxpayer compliance. Its technology roadmap aims to transform tax infrastructure and platforms to improve e-services for taxpayers.

Apart from being based on Regulation of the Minister of Finance Number 234 / PMK.01 / 2015, in carrying out its duties and functions, the Tax Directorate General is also based on Regulation of the Minister of Finance Number 210 / PMK.01 / 2017 and Regulation of the Minister of Finance Number 212 / PMK.01 / 2017.

A Brief History of the Directorate General of Taxes

The government agency first started out as a combination of several taxation units in Indonesia. These units were:

• The Tax Office
• The Bureau of Auction
• The Tax Accountant Office
• The Agricultural Tax Office. This office falls under the jurisdiction of the Directorate of Regional Development Contribution, locally known as IPEDA.

IPEDA was originally part of the Directorate General of Monetary. After the presidential decree No. 12 / 1976 in March 1976, it moved to Directorate General of Tax.

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Tax Directorate General organization is divided into head office units and operational office units. The head office consists of the Secretariat of the Directorate General, directorates, and positions of reviewers. The operational office unit consists of the Regional Office of the DGT (Kanwil DJP), the Tax Service Office (KPP), the Tax Service, Counselling and Consulting Office (KP2KP), and the Tax Data and Document Processing Centre (PPDDP).

The Directorate General of Taxes (DGT) organization, with a number of operational offices of more than 500 units and a number of employees of more than 42,000 people spread across the archipelago, is one of the large organizations within the Ministry of Finance. All existing resources are empowered to implement tax revenue security.

Empowering Through Education and Engagement

Propagating tax literacy and civic awareness forms the bedrock of the Directorate’s outreach initiatives. By fostering meaningful dialogues and educational campaigns, the agency empowers taxpayers with knowledge, nurturing a culture of compliance and civic responsibility.

The Path Ahead: Vision and Innovation

Steered by a visionary compass, the Tax Directorate General embarks on a transformative path. By fortifying its technological infrastructure, amplifying e-services, and fostering strategic alliances, it forges a future where fiscal sustainability converges with seamless taxpayer experiences.

Conclusion: Charting a Resilient Fiscal Future

As we unravel the multifaceted tapestry of Indonesia’s tax landscape, the Tax Directorate General emerges as a beacon of fiscal resilience and stewardship. Embracing innovation, education, and strategic foresight, it propels Indonesia towards a future where fiscal integrity and economic prosperity intertwine.

More information about the Directorate General of Taxes in Indonesia is available here.