Indonesia: New tax system procurement on track but to be implemented only in 2024

  • The process for the procurement of a core tax system is still on track as scheduled, with the tax authority set to appoint a procurement agent in Oct 19, the government has said.
  • Hantriono said the appointment of an external procurement agent was in line with the tax office’s aim to build a comprehensive core tax system in the country, which he said was the first system procurement of this scale in Indonesia.
  • The whole process, which includes the procurement of the IT facilities and is projected to cost IDR2.04tr for multiyear contracts, was scheduled to be concluded in 2023, and the new core tax system would be implemented in 2024, Hantriono added.
  • The procurement of the core tax system is one of the key pillars in Indonesia’s ongoing tax reform kicked off by Finance Minister Sri Mulyani Indrawati in 2016, which is aimed at overhauling operations of the tax office and improving services to taxpayers.
  • The reform of the tax administration is expected to increase Indonesia’s tax-to-GDP ratio by 1 to 1.5% points, according to an International Monetary Fund study.
  • The government aims to raise the ratio to 12.2% in 2019, up from 11.5% booked in 2018.

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