Jakarta, Indonesia Sentinel — The Indonesian Directorate General of Taxes (DJP) under the Ministry of Finance has yet to set a deadline for the transition period following the implementation of its new Coretax system. This advanced tax administration platform, introduced on January 1, 2025, is designed to enhance the efficiency and accuracy of tax processing. However, technical challenges have necessitated a transitional phase to ease taxpayers’ adaptation to the system.
As part of this transitional phase, the DJP has suspended administrative penalties for late tax reporting or invoicing errors caused by the switch to Coretax. According to Dwi Astuti, Director of Public Education, Services, and Public Relations at DJP, the transition period remains open-ended to ensure a smooth adjustment for both taxpayers and the tax authority.
“DJP is still enforcing the transition period for Coretax implementation,” Dwi said in a statement to CNBC on January 21, 2025. “The government aims to ensure taxpayers and the DJP can adapt to the new system without unnecessary burdens.”
Ensuring Taxpayer Compliance Without Penalties
Dwi emphasized that during this period, taxpayers will not face additional burdens. Administrative penalties, such as fines for late issuance of tax invoices or delayed reporting, will be waived if these issues arise due to the system migration. This approach reflects the government’s commitment to facilitating compliance without penalizing taxpayers for unforeseen technical difficulties.
This transition period is not the first instance of DJP adopting a flexible approach to policy changes. A similar strategy was implemented when Indonesia introduced a 12% Value-Added Tax (VAT) for luxury goods on January 1, 2025. The policy, which maintained an 11% VAT rate for non-luxury goods, allowed businesses three months (January to March 2025) to adjust their systems in accordance with Regulation PMK 131/2024.
Coretax: A Step Forward with Initial Challenges
Despite its challenges, Coretax represents a significant step forward in modernizing Indonesia’s tax administration. The system is expected to streamline processes, enhance data accuracy, and improve overall compliance. However, the initial implementation phase has revealed gaps that require immediate attention, prompting the DJP to take corrective actions.
For instance, technical glitches have affected the issuance of digital tax invoices. To address this, the DJP has prioritized system enhancements and provided additional support to taxpayers navigating the transition.
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Broader Implications for Indonesia’s Tax Reform
The Coretax system is part of Indonesia’s broader effort to reform its tax infrastructure. By leveraging digital tools and modernizing administrative processes, the government aims to improve tax compliance and collection efficiency.
While the transition has posed challenges, the DJP’s commitment to addressing taxpayer concerns and refining the system underscores the importance of adaptability in implementing large-scale reforms. With no fixed deadline for the transition period, taxpayers and administrators alike can focus on achieving long-term compliance and operational excellence.
As the Coretax rollout continues, it serves as a critical test case for Indonesia’s ambitions to modernize its fiscal systems and enhance economic resilience. The outcomes of this transition will likely shape the country’s approach to future reforms, reinforcing the importance of balancing innovation with practical support for stakeholders.
(Becky)
