DJP's Coretax: Between Modernisation Hopes and Implementation Challenges
Coretax is an administrative service system designed to facilitate users in fulfilling their tax obligations. Its development forms part of the Core Tax Administration System Renewal Project (PSIAP), regulated under Presidential Regulation No. 40 of 2018.
This project aims to redesign tax administration business processes through the construction of a system based on COTS (Commercial Off-the-Shelf), while comprehensively improving the tax database.
The primary objective of developing Coretax is to modernise the tax administration system, which has long been considered fragmented. Coretax emerges as a system that integrates all core tax administration business processes.
From taxpayer registration, reporting of Tax Notification Letters (SPT), tax payments, to examination and collection processes. With this integration, it is hoped that efficiency, transparency, and the quality of services to taxpayers will increase.
Fundamentally, the development of Coretax brings several strategic benefits. First, better data integration allows tax authorities to have a more accurate and real-time database. This is important to support data-driven policy-making as well as enhance tax compliance oversight capabilities.
Second, Coretax is intended to provide ease for taxpayers as all tax services can be accessed through a single integrated system. Third, Coretax is expected to deliver faster and more efficient public services. Fourth, Coretax is hoped to support increased voluntary compliance, as the system is easier to use and more transparent.
Nevertheless, the implementation of Coretax in the field indicates that the system is not yet running fully as expected. Several technical and operational constraints remain a primary concern, especially for taxpayers who interact directly with the system.
One of the most frequently complained issues is the Coretax system that often experiences downtime due to maintenance. This condition certainly disrupts the tax reporting and payment processes, particularly during critical periods such as the annual SPT reporting deadline. When the system is inaccessible, taxpayers may experience delays in fulfilling their obligations, which in turn can lead to administrative consequences.
In addition, from the user interface perspective, Coretax is considered less user-friendly, particularly in the main form for the Annual Personal Income Tax SPT. All fields in that form are displayed on a single page, making it difficult for taxpayers to navigate and fill in the substantial amount of data. This differs from the previous system on DJP Online, which used a step-by-step approach, thereby making it easier for users to fill out the Annual SPT systematically.
Another issue arises in the reporting of assets. In Coretax, taxpayers are required to fill in asset details down to the certificate number. However, the system still allows those fields to be filled with hyphens or arbitrary values. This creates inconsistency in the system design, as fields that should be mandatory lack adequate validation. Consequently, the quality of the resulting data becomes suboptimal.
The system’s imperfections are also evident in the treatment of a wife’s income combined with her husband’s. Based on the provisions of the Income Tax Law, a wife’s combined income should be treated as final income.
However, in practice, Coretax automatically classifies that income as other domestic income belonging to the husband that is not final in nature. This condition forces taxpayers to make manual adjustments, which undoubtedly adds complexity to reporting.
Furthermore, although Coretax is equipped with an automatic feature to retrieve withholding evidence data, the system has not fully pulled the underlying source income data for that evidence. As a result, there is a risk of data discrepancies in the Annual SPT.
Some taxpayers who overly rely on the system without double-checking may report SPTs with overpayment status, due to tax withholdings not matched with the appropriate income recognition basis.
Issues are also found in reporting Monthly Value Added Tax (PPN) SPTs. There are cases where taxpayers wishing to compensate for excess tax payments do not see the compensation value appear in the subsequent tax period. This certainly causes confusion and may disrupt taxpayers’ cash flow, particularly for business actors.
These various constraints indicate that the implementation of Coretax still requires refinement, both technically and in system design. Digital transformation in tax administration is indeed an unavoidable step, but the transition process to a fully integrated system requires time, adjustments, and ongoing evaluation.
Considering the various challenges present, it is important for the Directorate General of Taxes to continue improving the system based on user feedback. An adaptive and responsive approach to taxpayers’ needs will be the key to the long-term success of Coretax implementation. In addition, education for taxpayers needs to be enhanced so that they do not solely rely on the system but still verify the reported data.
Ultimately, Coretax remains a forward step in